Advertising and marketing of credit agreements
Without prejudice to Directive 2005/29/EC, Member States shall require that any advertising and marketing communications concerning credit agreements are fair, clear and not misleading. Wording in such advertising and marketing communications that may create false expectations for a consumer regarding the availability or the cost of credit or the total amount payable by the consumer shall be prohibited.
Standard information to be included in advertising of credit agreements
1. Member States shall require that advertising concerning credit agreements include a clear and prominent warning to make consumers aware that borrowing costs money, using the wording ‘Caution! Borrowing money costs money’ or an equivalent wording. 2. Member States shall require that advertising concerning credit agreements which indicates an interest rate or any figures relating to any cost of credit to the consumer include standard information in accordance with this Article. The obligation referred to in the first subparagraph shall not apply where national law requires the indication of the annual percentage rate of charge in advertising concerning credit agreements which does not indicate an interest rate or any figures relating to any cost of credit to the consumer within the meaning of the first subparagraph. 3. The standard information shall be easily legible or clearly audible, as appropriate, and adapted to the technical constraints of the medium used for advertising and shall specify, in a clear, concise and prominent way, all of the following elements: (a) the borrowing rate, fixed or variable or both, together with particulars of any charges included in the total cost of the credit to the consumer; (b) the total amount of credit; (c) the annual percentage rate of charge; (d) where applicable, the duration of the credit agreement; (e) in the case of credit in the form of deferred payment for specific goods or services, the cash price and the amount of any advance payment; (f) where applicable, the total amount payable by the consumer and the amount of the instalments. In specific and justified cases where the medium used to communicate the standard information referred to in the first subparagraph does not allow the information to be visually displayed, points (e) and (f) of that subparagraph shall not apply. 4. The standard information referred to in paragraph 3, first subparagraph, shall be specified by means of a representative example. 5. Where the conclusion of a contract regarding an ancillary service relating to the credit agreement is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed, and the cost of that service cannot be determined in advance, the standard information referred to in paragraph 3, first subparagraph, shall specify in a clear, concise and prominent way the obligation to enter into that contract. 6. Without prejudice to Directive 2005/29/EC, in specific and justified cases where the electronic medium used to communicate the standard information referred to in paragraph 3 of this Article does not allow that information to be visually displayed in a prominent and clear manner, the consumer shall be able to access the information referred to in points (e) and (f) of the first subparagraph of that paragraph by means of clicking, scrolling or swiping. 7. Member States shall prohibit advertising for credit products which: (a) encourages consumers to seek credit by suggesting that credit would improve the financial situation of those consumers; (b) specifies that outstanding credit agreements or registered credit in databases have little or no influence on the assessment of a credit application; (c) falsely suggests that credit leads to an increase in financial resources, constitutes a substitute for savings or can raise a consumer’s living standards. 8. Member States may prohibit, inter alia, advertising for credit products which: (a) highlights the ease or speed with which credit can be obtained; (b) states that a discount is conditional upon taking up credit; (c) offers ‘grace periods’ of more than three months for the repayment of credit instalments.
General information
1. Member States shall ensure that clear and comprehensible general information about credit agreements is made available to consumers by creditors or, where applicable, by credit intermediaries, at all times on paper or on another durable medium chosen by the consumer. General information about credit agreements which is made available by creditors or, where applicable, by credit intermediaries at their premises shall be made available to consumers at least on paper. 2. The general information referred to in paragraph 1 shall include at least the following: (a) the identity, geographical address, telephone number and email address of the issuer of the information; (b) the purposes for which the credit may be used; (c) the possible duration of the credit agreement; (d) types of available borrowing rate, indicating whether fixed or variable or both, with a short description of the characteristics of a fixed and variable rate, including related implications for the consumer; (e) a representative example of the total amount of credit, the total cost of the credit to the consumer, the total amount payable by the consumer and the annual percentage rate of charge; (f) an indication of possible further costs, not included in the total cost of the credit to the consumer, to be paid in connection with a credit agreement; (g) the range of different options available for reimbursing the credit to the creditor, including the number, frequency and amount of the regular repayment instalments; (h) a description of the conditions directly relating to early repayment; (i) a description of the right of withdrawal; (j) indication of ancillary services the consumer is obliged to acquire in order to obtain the credit or to obtain it on the terms and conditions marketed and, where applicable, a clarification that the ancillary services may be purchased from a provider that is not the creditor; and (k) a general warning concerning possible consequences of non-compliance with the commitments linked to the credit agreement.
Pre-contractual information
1. Member States shall require that the creditor and, where applicable, the credit intermediary provide the consumer with the clear and comprehensible pre-contractual information needed to compare different offers in order to take an informed decision on whether to conclude a credit agreement on the basis of the credit terms and conditions offered by the creditor and, where applicable, the preferences expressed and information supplied by the consumer. Such pre-contractual information shall be provided to the consumer in good time before the consumer is bound by any credit agreement or offer, including where means of distance communication as defined in Article 2, point (e) of Directive 2002/65/EC are used. In the event that the pre-contractual information referred to in the first subparagraph of this paragraph is provided less than one day before the consumer is bound by the credit agreement or offer, Member States shall require that the creditor and, where applicable, the credit intermediary send a reminder to the consumer of the possibility to withdraw from the credit agreement and of the procedure to follow for withdrawing, in accordance with Article 26. That reminder shall be provided to the consumer, on paper or on another durable medium chosen by the consumer and specified in the credit agreement, between one and seven days after the conclusion of the credit agreement or, where applicable, the submission of the binding credit offer by the consumer. 2. The pre-contractual information referred to in paragraph 1 shall be provided on paper or on another durable medium chosen by the consumer by means of the Standard European Consumer Credit Information form set out in Annex I. All the information provided in the form shall be equally prominent. The creditor shall be deemed to have fulfilled the information requirements laid down in this paragraph and in Article 3(1) and (2) of Directive 2002/65/EC if that creditor has supplied that form. 3. The pre-contractual information referred to in paragraph 1 shall specify all of the following elements in a prominent way in the first part of the Standard European Consumer Credit Information form on one page: (a) the identity of the creditor as well as, where applicable, of the credit intermediary involved; (b) the total amount of credit; (c) the duration of the credit agreement; (d) the borrowing rate, or all borrowing rates if different borrowing rates apply in different circumstances; (e) the annual percentage rate of charge and the total amount payable by the consumer; (f) in the case of a credit in the form of deferred payment for specific goods or services and in the case of linked credit agreements, the specific goods or services and their cash price; (g) the costs in the case of late payments, i.e. the interest rate applicable in the case of late payments and the arrangements for its adjustment and, where applicable, any charges payable for default; (h) the amount, number and frequency of payments to be made by the consumer and, where appropriate, the order in which payments will be allocated to different outstanding balances charged at different borrowing rates for the purposes of reimbursement; (i) warning regarding the consequences of missing or late payments; (j) the existence or absence of a right of withdrawal and, where applicable, the withdrawal period; (k) the existence of a right of early repayment, and, where applicable, information concerning the creditor’s right to compensation; (l) the geographical address, telephone number and email address of the creditor as well as, where applicable, the geographical address, telephone number and email address of the credit intermediary involved. 4. In the event that all the elements referred to in paragraph 3 cannot be displayed in a prominent way on one page, they shall be displayed in the first part of the Standard European Consumer Credit Information form on two pages at most. In that case, the information referred to in points (a) to (g) of that paragraph shall be displayed on the first page of the form. 5. The pre-contractual information referred to in paragraph 1 shall specify all of the following elements, which shall be displayed after and noticeably separated from the elements listed in paragraph 3: (a) the type of credit; (b) the conditions governing the drawdown; (c) where different borrowing rates apply in different circumstances, the conditions governing the application of each borrowing rate and, where available, any index or reference rate applicable to each initial borrowing rate, as well as the periods, conditions and procedures for changing each borrowing rate; (d) where a credit agreement provides different ways of drawdown with different charges or borrowing rates and the creditor uses the assumption set out in Annex III, Part II, point (b), an indication that other drawdown mechanisms for the relevant type of credit agreement may result in higher annual percentage rates of charge; (e) where applicable, the charges for maintaining one or more compulsory accounts recording both payment transactions and drawdowns, the charges for using a means of payment for both payment transactions and drawdowns, any other charges deriving from the credit agreement, and the conditions under which any of those charges may be changed; (f) a representative example illustrating the annual percentage rate of charge and the total amount payable by the consumer, referring to all of the assumptions used in order to calculate that rate; where the consumer has informed the creditor of one or more components of his or her preferred credit, such as the duration of the credit agreement and the total amount of credit, the creditor shall take those components into account; (g) where applicable, any costs payable by the consumer to a notary on conclusion of the credit agreement; (h) the obligation, if any, to enter into an ancillary service contract relating to the credit agreement, where the conclusion of such a contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed; (i) where applicable, the sureties required; (j) where applicable, information concerning the way in which the creditor’s compensation will be determined in the event of early repayment; (k) the consumer’s right to be informed immediately and free of charge, pursuant to Article 19(6), of the result of a database consultation carried out for the purposes of assessing his or her creditworthiness; (l) the consumer’s right, as set out in paragraph 8 of this Article, to be supplied, on request on paper or on another durable medium and free of charge, with a copy of the draft credit agreement, provided that the creditor, at the time of the request, is willing to proceed to the conclusion of the credit agreement; (m) where applicable, an indication that the price was personalised on the basis of automated processing, including profiling; (n) where applicable, the period of time during which the creditor is bound by the pre-contractual information provided in accordance with this Article; (o) the possibility for the consumer of having recourse to an out-of-court complaint and redress mechanism and the methods for having access to it; (p) a warning and explanation regarding the legal and financial consequences of non-compliance with the other commitments linked to the specific credit agreement; (q) a repayment schedule containing all payments and repayments over the duration of the credit agreement, including the payments and repayments for any ancillary services relating to the credit agreement which are sold simultaneously, whereby payments and repayments, in the event that different borrowing rates apply in different circumstances, are based on reasonable upward changes in the borrowing rate. Where the credit agreement references a benchmark as defined in Article 3(1), point (3), of Regulation (EU) 2016/1011 of the European Parliament and of the Council ( 28 ) , the name of that benchmark and of its administrator and potential implications of that benchmark for the consumer shall be specified in a separate document which may be annexed to the Standard European Consumer Credit Information form. 6. Information displayed in the Standard European Consumer Credit Information form shall be consistent. It shall be clearly legible and shall take into account the technical constraints of the medium on which it is displayed. Information shall be displayed in an adequate and suitable way on the different channels taking into account interoperability. Any additional information which the creditor may provide to the consumer shall be clearly legible and given in a separate document, which may be annexed to the Standard European Consumer Credit Information form. 7. By way of derogation from paragraph 5 of this Article, in the case of voice telephony communications, as referred to in Article 3(3) of Directive 2002/65/EC, the description of the main characteristics of the financial service to be provided pursuant to Article 3(3), point (b), second indent, of that Directive shall include at least the elements referred to in paragraph 3 of this Article. In such case, the creditor and, where applicable, the credit intermediary shall provide the consumer with the Standard European Consumer Credit Information form on a durable medium immediately after the conclusion of the credit agreement. 8. Upon request from the consumer, the creditor and, where applicable, the credit intermediary shall, in addition to the Standard European Consumer Credit Information form, provide the consumer free of charge with a copy of the draft credit agreement on paper or on another durable medium, provided that the creditor, at the time of the request, is willing to proceed to the conclusion of the credit agreement with the consumer. 9. In the case of a credit agreement under which payments made by the consumer do not give rise to an immediate corresponding amortisation of the total amount of credit, but are used to constitute capital during periods and under conditions laid down in the credit agreement, or in an ancillary agreement, the creditor and, where applicable, the credit intermediary shall in the pre-contractual information referred to in paragraph 1 include a clear and concise statement that such credit agreements do not provide for a guarantee of repayment of the total amount of credit drawn down under the credit agreement, unless such a guarantee is given expressly. 10. This Article shall not apply to suppliers of goods or providers of services acting as credit intermediaries in an ancillary capacity. This is without prejudice to the creditor’s, or where applicable, credit intermediary’s obligation to ensure that the consumer receives the pre-contractual information referred to in this Article.
Pre-contractual information with regard to credit agreements referred to in Article 2(6) or (7)
1. For credit agreements referred to in Article 2(6) or (7), the pre-contractual information referred to in Article 10(1) shall, by way of derogation from Article 10(2), be provided on paper or on another durable medium chosen by the consumer by means of the European Consumer Credit Information form set out in Annex II. That information shall be clear and comprehensible. All information provided in that form shall be equally prominent. The creditor shall be deemed to have fulfilled the information requirements laid down in this paragraph and in Article 3(1) and (2), of Directive 2002/65/EC if that creditor has supplied that form. 2. For credit agreements referred to in Article 2(6) or (7), the pre-contractual information referred to in Article 10(1) shall, by way of derogation from Article 10(3), specify all of the following elements, in a prominent way in the first part of the European Consumer Credit Information form on one page: (a) the identity of the creditor as well as, where applicable, of the credit intermediary involved; (b) the total amount of credit; (c) the duration of the credit agreement; (d) the borrowing rate, or all borrowing rates if different borrowing rates apply in different circumstances; (e) the annual percentage rate of charge and the total amount payable by the consumer; (f) in the case of a credit in the form of deferred payment for specific goods or services and in the case of linked credit agreements, the specific goods or services and their cash price; (g) the costs in the case of late payments, i.e. the interest rate applicable in the case of late payments and the arrangements for its adjustment, and, where applicable, any charges payable for default; (h) the amount, number and frequency of payments to be made by the consumer and, where appropriate, the order in which payments will be allocated to different outstanding balances charged at different borrowing rates for the purposes of reimbursement; (i) warning regarding the consequences of missing or late payments; (j) the existence or absence of a right of withdrawal; (k) the existence of a right of early repayment, and, where applicable, information concerning the creditor’s right to compensation; (l) the geographical address, telephone number and email address of the creditor as well as, where applicable, the geographical address, telephone number and email address of the credit intermediary involved. 3. In the event that all the elements referred to in paragraph 2 cannot be displayed in a prominent way on one page, they shall be displayed in the first part of the European Consumer Credit Information form on two pages at most. In that case, the information referred to in points (a) to (g) of that paragraph shall be displayed on the first page of the form. 4. The pre-contractual information referred to in paragraph 1 shall specify all of the following elements, which shall be displayed after and noticeably separated from the elements listed in paragraph 2: (a) the type of credit; (b) where different borrowing rates apply in different circumstances, the conditions governing the application of each borrowing rate, any index or reference rate applicable to the initial borrowing rate, the charges applicable from the time the credit agreement is concluded, and, where applicable, the conditions under which those charges may be changed; (c) a representative example illustrating the annual percentage rate of charge and the total amount payable by the consumer, referring to all of the assumptions used in order to calculate that rate; (d) the conditions and procedure for terminating the credit agreement; (e) where applicable, information concerning the way in which the creditor’s compensation will be determined in the event of early repayment; (f) where applicable, an indication that the consumer may be requested to repay the amount of credit in full at any time; (g) a reference to the consumer’s right to be informed immediately and free of charge, pursuant to Article 19(6), of the result of a database consultation carried out for the purposes of assessing his or her creditworthiness; (h) where applicable, an indication that the price was personalised on the basis of automated processing, including profiling; (i) where applicable, the period of time during which the creditor is bound by the pre-contractual information provided in accordance with this Article; (j) a reference to the possibility for the consumer of having recourse to an out-of-court complaint and redress mechanism and the methods for having access to it; (k) a warning and explanation regarding the legal and financial consequences of non-compliance with the other commitments linked to the specific credit agreement; (l) a repayment schedule containing all payments and repayments over the duration of the credit agreement, including the payments and repayments for any ancillary services relating to the credit agreement which are sold simultaneously, whereby payments and repayments, in the event that different borrowing rates apply in different circumstances, are based on reasonable upward changes in the borrowing rate. 5. Information displayed in the European Consumer Credit Information form shall be consistent. It shall be clearly legible and shall take into account the technical constraints of the medium on which it is displayed. Information shall be displayed in an adequate and suitable way on the different channels, taking into account interoperability. 6. By way of derogation from paragraph 4 of this Article, in the case of voice telephony communications, as referred to in Article 3(3) of Directive 2002/65/EC, the description of the main characteristics of the financial service to be provided pursuant to Article 3(3), point (b), second indent, of that Directive shall include at least the elements referred to in paragraph 2 of this Article. In such case, the creditor and, where applicable, the credit intermediary shall provide the consumer with the European Consumer Credit Information form on a durable medium immediately after the conclusion of the credit agreement. 7. Upon request from the consumer, the creditor and, where applicable, the credit intermediary shall, in addition to the European Consumer Credit Information form, provide the consumer free of charge with a copy of the draft credit agreement, provided that the creditor, at the time of the request, is willing to proceed to the conclusion of the credit agreement with the consumer. 8. This Article shall not apply to suppliers of goods or providers of services acting as credit intermediaries in an ancillary capacity. This is without prejudice to the creditor’s or, where applicable, the credit intermediary’s obligation to ensure that the consumer receives the pre-contractual information referred to in this Article.
Adequate explanations
1. Member States shall ensure that creditors and, where applicable, credit intermediaries are required to provide adequate explanations to the consumer on the proposed credit agreements and any ancillary services that make it possible for the consumer to assess whether the proposed credit agreements and ancillary services are adapted to the consumer’s needs and financial situation. Such explanations shall be provided free of charge and before concluding the credit agreement. The explanations shall include the following elements: (a) the information referred to in Articles 10, 11 and 38; (b) the essential characteristics of the credit agreement or of the ancillary services proposed; (c) the specific effects that the credit agreement or the ancillary services proposed may have on the consumer, including the consequences of payment default or late payment by the consumer; (d) where ancillary services are bundled with a credit agreement, whether each component of the bundle can be terminated separately and the implications for the consumer of such termination. 2. Member States may, in justified cases, adapt the requirement referred to in paragraph 1 with regard to the manner in which the explanations are to be given and the extent to which they are to be given to the following: (a) the circumstances of the situation in which the credit is offered; (b) the person to whom the credit is offered; (c) the type of the credit offered.
Personalised offers on the basis of automated processing
Without prejudice to Regulation (EU) 2016/679, Member States shall require that creditors and credit intermediaries inform consumers in a clear and comprehensible manner when they are presented with a personalised offer that is based on automated processing of personal data.
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