CONSUMER CREDIT DIRECTIVE - The Finnish Consumer Ombudsman gives 9 important points regarding reform of the CCD. REFORM OF THE CONSUMER CREDIT DIRECTIVE: NINE IMPORTANT POINTS FOR CONSUMERS The European Commission's objective is to offer service providers legislation that will allow them to operate in the same way in all the member states. This can be achieved through the full harmonization of key legislation or the principle of mutual recognition. Neither of these is problem-free from consumers' viewpoint. Full harmonization is a natural solution as long as it does not lower the level of consumer protection. All too often in EU matters the goal of a high level of consumer protection remains secondary to the goal of an efficient single market for businesses. The principle of mutual recognition, on the other hand, does not increase consumers' confidence, since the applicable law for credit contracts would be decided on a case-by-case basis and often the law in the business's home country would apply. So consumer protection could vary according to the product and the situation would be confusing for both consumers and enforcement authorities. Key questions for consumers' legal position are as follows: • The present level of consumer protection must be ensured. There must not be any uncertainty about applicable law for credit relations. Applicable law should be according to the Rome Convention, which says that a contract should be governed by the law of the country in which the consumer has his habitual residence. • The annual percentage rate of charge must be indicated in the marketing stage for all credits, regardless of the amount of credit or the length of the credit period. • In calculating the annual percentage rate of charge, all the costs that the consumer must pay to get credit must be included, regardless of whom costs are paid to. • Complying with the principle of responsible lending is important both when a credit contract is concluded and during a credit relation. • Obligations to provide information must emphasize the provision of sufficient and essential information to consumers in a clear way. • Contract terms must be unambiguous and clear. • Consumers must have the right to pay off credit before the due date. • Payment obligations if credit is paid off before the due date must be strictly limited. • Joint responsibility of the credit provider and the retailer or service provider is an important principle for consumers, which should be statutory and sufficiently comprehensive. The reform of the Consumer Credit Directive has been in preparation for a long time, and during the Finnish Presidency of the EU the Commission's newest proposal will probably be discussed in the Council's consumer protection working group on several occasions. The co-decision procedure with the European Parliament is likely to continue next year. (from Kuluttajavirasto, the Finnish Consumer Ombudsman: Newsletter, Current Issues on Consumer Law 4/2006) ID: 37489 Author(s): iff Publication date: 06/06/06     Finnish Consumer Ombudsman's newsletter 4/2006 (2582297 Bytes) URL(s): http://www.kuluttajavirasto.fi

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