An EU-wide investigation of websites offering consumer credit took place in September 2011 to check whether consumers are receiving the information to which they are entitled under EU consumer law before signing a consumer credit contract. National enforcement authorities checked more than 500 websites across the 27 Member States plus Norway and Iceland.

The „Sweep” led by the EU and was carried out by national enforcement authorities who conduct simultaneous, coordinated checks for breaches in consumer law in a particular sector.

The sweep operation checked in particular how business is applying the Consumer Credit Directive (recently transposed in Member States), which aims to make it easier for consumers to understand and compare credit offers.

National enforcement authorities checked 562 websites across the 27 Member States plus Norway and Iceland. It was concluded that only 30% passed the sweep test for compliance with the relevant EU consumer rules and 70% of these sites were flagged for further investigation.

Among the most typical problem included that the advertising did not include the required standard information (such as the annual percentage rate of charge, information on whether charges on obligatory ancillary services (e.g. insurance) were included in the total cost, or on the duration of the credit agreement), or the offers omitted key information that is essential for making a decision (such as the different elements of the total cost, some of the costs related to the credit e.g. an arrangement fee); in other cases the costs were presented in a misleading way (if the consumer is not informed that beyond the cost of the consumer credit itself there is an added obligatory insurance, or in the way the price is calculated).

National enforcement authorities will now contact financial institutions and credit intermediaries about suspected irregularities and ask them to clarify or take corrective action. Failure to do so, depending on the national legislation which is applicable, can result in legal action leading to fines or even closure of the websites. The national enforcement authorities are asked to report back to the European Commission by autumn 2012.

Resource:
http://ec.europa.eu/consumers/enforcement/sweeps_en.htm

MEMO/12/02