Protecting consumers in the cost of living crisis

In the middle of a cost of living crisis unscrupulous lenders stand to earn big bonuses, taking advantage of people earning low wages while prices continue to skyrocket.

Offers that sound too good to be true are often just that. There’s no such thing as a free lunch, as the saying goes. 

Good news from the European Parliament as MEPs agreed a provisional deal with the European Council to protect consumers from being ripped off by creditors. Key features of the new rules include:

  • Proper assessment of consumer creditworthiness;
  • Stricter rules on advertising to reduce mis-selling to vulnerable consumers;
  • Effective measures against overcharging consumers;
  • Right to withdraw from a credit agreement with no reason within 14 days.

Importantly, the new rules will include a right to be forgotten for cancer patients. This is the first time that EU law recognises the right to not be penalised on the basis of disease history. While it will only apply to insurance taken out to access loans, and excludes mortgages, it is an important first step in ending the financial discrimination cancer survivors often face. 

Left MEP and rapporteur on consumer credit, Kateřina Konečná, (KSČM, Czechia), said: “In this time of economic crisis, we have prepared legislation that will really protect consumers in the field of consumer credit. For the first time ever, we managed to enforce the guarantee of the right to be forgotten for cancer patients in EU legislation. Credit ads will now have to carry a warning similar to the one on cigarette packs, and some dangerous types of ads will even be banned in member states.”

The provisional political agreement reached by the European Parliament’s negotiating team will now have to be approved first by the Internal Market and Consumer Protection Committee and then by a plenary vote. The Council also has to approve the deal, before it can come into force.

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