REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Directive 2008/48/EC on credit agreements for consumers
Date: 2014-05-14
Institutions: European Commission
Subjects: consumer behaviour, consumer credit, consumer information, contract, national implementing measure, public awareness campaign, redemption, single market













EUR-Lex - 52014DC0259 - EN











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52014DC0259

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the implementation of Directive 2008/48/EC on credit agreements for consumers /* COM/2014/0259 final */









TABLE OF CONTENTS
REPORT
FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL
on
the implementation of Directive 2008/48/EC on credit agreements for consumers
1............ Introduction. 2
2............ Transposition of the
Directive in the Member States. 3
3............ Exercise and impact
of the regulatory choices under Article 27(2) 3
4............ Specification of
certain concepts contained in the Directive  8
5............ Relevance to the
consumer credit markets of thresholds as set out in Article 2(2)(c)and
thresholds and percentages used to calculate the compensation due for early
repayment 11
6............ The Directive’s
impact on consumer credit markets. 11
7............ The Directive’s
impact on consumer protection. 14
8............ Conclusions. 19
1.           Introduction
More
than twenty years after the adoption of the first Directive on consumer credit
in 1987[1],
Directive 2008/48/EC (Consumer Credit Directive – CCD)[2]
was adopted and Member States had to transpose it by 11 June 2010. Since then,
the Commission has adopted Directive 2011/90/EU[3] in order to
ensure that the assumptions for the calculation of the annual percentage rate
of charge (APR) more accurately reflect the products sold on the market and has
also published guidelines on the application of the CCD in relation to costs
and the APR.
The
main aim of the CCD is to offer a high degree of consumer protection and thus
to boost consumer confidence, enable free movement of credit offers across
borders and remedy distortions of competition arising from differences in
national laws regarding consumer credit. At the same time it should be stressed
that it is not the objective of the Directive to incite consumers to take more
credit, but rather to provide them with all necessary information and rights to
thoroughly reflect before taking credit.
However, it is important to remember
that the following credit agreements are outside the scope of the directive:

 All credit
     agreements which are secured either by a mortgage or by another comparable
     security commonly used in a Member State on immovable property or secured
     by a right related to immovable property (Article 2(2)(a)), and
 All
     credit agreements whose purpose is to acquire or retain property rights in
     land or in an existing or projected building (Article 2(2)(b)).

It
should also be noted that any credit agreement involving a total amount of less
than 
EUR 200 or more than EUR 75 000 is outside the scope of the CCD as well,
although Member States may voluntarily extend the application of the CCD to
credit agreements outside its scope.
Article
27(2) of the CCD
requires the
Commission to undertake, every five years, a review of the thresholds laid down
in this Directive and the percentages used to calculate the compensation due in
the event of early repayment, and also to monitor the way in which the regulatory
choices of Member States affect the internal market and consumers.
Additionally, the European Parliament, in its resolution of 20 November 2012,
called on the Commission to present a report on the implementation of the
Directive and to assess fully its impact in terms of consumer protection.
The
Commission has accordingly adopted this report, based on the transposition
check that is still on-going and on the evidence gathered by a consumer credit
market study[4],
as well as a study on regulatory choices of the Member States[5],
the latter two having been carried out by external contractors.
2.           Transposition of the Directive in the Member States
2.1.        Deadline for transposition
According
to Article 27(1), Member States had to adopt and publish the provisions necessary
to comply with the CCD before 11 June 2010, 24 months after the entry into
force of the Directive. They also had to apply those provisions as from the
same day. A large number of Member States failed to communicate their national
implementing measures on time. For this reason, upon expiry of the
transposition deadline the Commission initiated infringement proceedings
against 16 Member States. Furthermore, four Member States failed to ensure its
timely entry into force or effective application, requiring a transitional
period not provided for by the Directive. In the meantime, since all Member
States have adopted and communicated their transposition measures, the
infringement proceedings based on the ground that the transposition measures
have not been notified to the Commission have been closed.
2.2.        Follow-up to transposition
Twenty
Member States transposed the CCD by adopting new legislation, while the rest
introduced amendments to pre-existing legislation. Two Member States transposed
the CCD via secondary legislation, while one transposed it by an emergency
ordinance which was later confirmed by a Law.
According
to the Commission’s evaluation, no systematic deficiencies in the transposition
of the Directive by Member States have been identified so far. However, in a
number of Member States, some provisions of the Directive appear to be absent
or to have been wrongly or incompletely transposed. Those are the findings of a
preliminary analysis by the Commission.
The
Commission services first launched a dialogue with the Member States to obtain
more information about the manner in which they have transposed the Directive,
as well as to receive certain clarifications/ confirmation on existing
information. 
Certain Member States already acknowledged at this stage deficiencies in their
transposing provisions and promised to amend them in order to bring them into
compliance with the Directive. For other Member States, the Commission services
have opened more thorough investigations, which might lead to infringement
procedures.  
3.           Exercise and impact of the regulatory choices under
Article 27(2)[6]
Some provisions
of the CCD are optional, in that Member States can choose whether or not to
implement their requirements (hereinafter ‘regulatory choices’). According to
Article 27(2) of the CCD, the European Commission must monitor the effect that
regulatory choices, as referred to in Articles 2(5), 2(6), 4(1), 4(2)(c), 6(2),
10(1), 10(5)(f), 14(2) and 16(4), have on the internal market and consumers.
The study commissioned by the Commission, while focusing on
the possible consequences of the regulatory choices exercised by the Member
States in terms of impact on the internal credit market and the protection of
consumers, in each Member State separately and across the European Union, has
demonstrated the complexity of such assessment. The main factors influencing
the qualitative assessment of such impacts include the relatively short time
that has elapsed since the transposition of the Directive, strongly diverging national
regulatory and credit market contexts, in particular as to national situation
prevailing before the CCD entered into force and the actual behaviour and/or
actions of consumers and credit providers. Finally, some impacts could stem
from market developments, especially the financial crisis, rather than from the
implementation of the CCD. [7]
3.1.        Exemption for organisations established for the mutual
benefit of their members (Art. 2(5))
Six Member States (Cyprus, Ireland,
Lithuania, Latvia, Romania and United Kingdom (England and Wales, Scotland and
Northern Ireland)) have used the Article 2(5) option to apply only certain
provisions of the Directive to credit agreements concluded by organisations
established for the mutual benefit of their members as described in Article
2(5)(a) to (e).
Some stakeholders[8]
consider this legal choice has had a positive impact on the internal market and
consumer protection as it lightens the administrative burden on those
organisations that offer a less aggressive and cheaper alternative to some
other types of credit provider. They also increase consumer choice, help
restrict the market penetration of more expensive types of credit (e.g. payday
loans) and improve financial inclusion. Potentially negative aspects stemming from
the use of this regulatory choice by some Member States include issues relating
to fairness and equity between credit providers[9], maximum
harmonisation as a legislative principle, ease of enforcement and legal clarity
for consumers.
3.2.        Credit agreements in respect of deferred payment or
repayment methods (Art. 2(6))
Eighteen Member States (Belgium,
Croatia, Cyprus, Czech Republic, Denmark, Germany, Greece, Italy, Latvia,
Lithuania, Luxembourg, Malta, Poland, Portugal, Romania, Slovakia, Slovenia and
Spain) have used the option provided for in Article 2(6) to apply only certain
provisions of the CCD to credit agreements which provide for arrangements to be
agreed by the creditor and the consumer in respect of deferred payment or
repayment methods, where the consumer is already in default on the initial
credit agreement and where the conditions set out in Article 2(6)(a) and (b)
are satisfied.
The purpose of this regulatory choice is
to encourage credit providers to seek a more mutually beneficial solution
whereby the consumer can defer payment or arrange different repayment methods.
Presumably, this would have a positive impact in terms of consumer protection.
However, stakeholders tend not to be aware of the practical application of this
regulatory choice or of any impact that could be directly attributable to it
(which may be explained by the fact that, for some Member States, the national
transposition of the regulatory choice reflects the standard business practice
which existed prior to the CCD). Around 15 % of respondents to the online
survey indicated that exercising the regulatory choice under Article 2(6) had
resulted in a positive impact in terms of consumer protection, while 5 %
of respondents indicated that there had been a negative impact; however, these
views were not substantiated[10].
3.3.        National rules requiring APR to be shown in advertising
which does not indicate an interest rate or figures relating to any cost of
credit to the consumer (Art. 4(1))
Four Member States (Cyprus, Hungary,
Sweden and United Kingdom (all jurisdictions)) have used the exception provided
for in the second paragraph of Article 4(1), i.e. they require the indication
of the APR in advertising concerning credit agreements which does not indicate
an interest rate or figures relating to any cost of credit to the consumer but
not the 'standard information' listed in Article 4(2) 
In general, stakeholders consulted in
the Member States concerned were unable to identify specific impacts relating
to the transposition of this regulatory choice. The main perceived benefit was
that it makes advertisements short and clear[11], at
the same time providing consumers with the information on the APR which enables
them to compare different offers. However, concerns were expressed that not all
consumers realise that the APR indicated in advertising may refer, according to
national law and if applicable, only to a ‘representative example’ and that the
advertised rate may not be the rate that they will actually receive.
3.4.        APR in advertising, in pre-contractual information and
in credit agreements covered by Article 2(3) (overdrafts to be paid on demand
or within three months) (Art. 4(2)(c), Art. 6(2) and Art. 10(5)(f))
Eight
Member States (Bulgaria, Denmark, Ireland, Luxembourg, Malta, Poland, Spain and
United Kingdom (England and Wales, Scotland and Northern Ireland)) have used
the Article 4(2)(c) option allowing Member States to decide that the APR does
not need to be provided in advertising concerning credit agreements in the form
of an overdraft facility and where the credit has to be repaid on demand or
within three months (Art. 2(3) credit agreements). Ten Member States (Croatia,
Denmark, Germany, Ireland, Luxembourg, Malta, Poland, Slovakia, Spain and
United Kingdom (England and Wales, Scotland and Northern Ireland)) have used
the option under Article 6(2) allowing Member States to decide that the APR
does not need to be provided in pre-contractual information concerning Article
2(3) credit agreements. Eleven Member States (Czech Republic, Germany, Denmark,
Luxembourg, Spain, Ireland, Malta,  Netherlands, Poland, Slovakia and United
Kingdom (England and Wales, Scotland and Northern Ireland)) have used the
Article 10(5)(f) option allowing Member States to decide that the APR does not
need to be provided in credit agreements covered by Article 2(3).
The
opinions expressed on the consequences of those regulatory choices appear to
depend significantly upon whether the view is taken that information on the APR
is useful (or not) to the consumer for the specific credit agreements covered
by Article 2(3)[12].
It is also important to note that stakeholders were either not aware of
any impact resulting from those regulatory choices or believed that there had
been limited (if any) impact on the internal credit market or on consumers.
This is because it appears that the credit agreements covered by Article 2(3)
are, in the main, ‘niche’ products which are only used in some Member States[13] by
specific credit providers and/or consumers. Moreover, it is fundamentally
difficult to assess the impact of non-provision of information and to
distinguish the impact of non-provision of information on APR from other
influencing factors (the financial situation of the debtor, the financial
knowledge of the debtor, the impact of the financial crisis on borrowing,
etc.).
Statements
as to the positive impact[14] of
those regulatory choices in terms of consumer protection assume that
information on the APR for overdrafts might be misunderstood by consumers (for
instance, due to difficulties with calculating the APR for advertising purposes
for this specific product). Furthermore, the provisions in question have given
Member States the opportunity to find a balance between ensuring an adequate
level of consumer protection and placing burden on creditors. Indeed during the
consultation process, credit providers and industry associations noted that, if
they had been required to calculate the APR for credit agreements under Article
2(3), they would have incurred additional costs for minimal additional benefit.
In that respect the regulatory choices were seen as having a positive impact on
the internal credit market. On the other hand, it has been suggested that,
regardless of any possible failings, the APR needs to be shown for all types of
credit product in order to promote transparency and consistency and provide all
possible information to the consumer[15]. This
presupposes that the APR is likely to help a consumer (if sufficiently
financially literate) to compare different offers and make an informed
decision. From this perspective, it could be argued that some negative impacts
may have occurred in the Member States that exercise those regulatory choices.
This would however
be
very limited, given the small proportion of credit agreements under Article
2(3) across the Union.
3.5.        National rules regarding the validity of the conclusion
of credit agreements (Art. 10(1))
All
28 Member States have maintained or introduced national rules regarding the
validity of the conclusion of credit agreements in accordance with Article
10(1). All Member States have decided under this regulatory choice that
electronic signatures should generally be valid for the conclusion of credit
agreements. While some positive impact on consumer welfare has been indicated
by users (particularly as internet and online activity increases), in Germany the use of written contracts is considered important for maintaining a high level
of consumer protection (allowing consumers to reflect on and realise the
importance of the contract). This is particularly relevant in the light of the
negative experiences associated with the electronic provision of credit, such
as SMS credit, which is widely available in the Nordic countries. At
present, the reality is that across the Union most credit agreements are still
drawn up in paper form.
3.6.        Right of withdrawal in the case of linked credit
agreements (Art. 14(2))
Three
Member States (France, Romania and Slovenia) have invoked the existence of
pre-existing legislation in order to use the exception set out in Article 14(2)
regarding linked credit agreements as defined in Article 3(n), according to
which where legislation pre-dating the Directive’s entry into force already
provides that funds cannot be made available to the consumer before the expiry
of a specific period, Member States can reduce the 14-day withdrawal period to
that specific period at the consumer’s explicit request.
This
regulatory choice provides consumers with the opportunity to receive the goods
or services they have purchased early, and is supposed to help ensure
regulatory consistency with existing national legislation. In addition it gives
more legal clarity for credit providers. By specifying that this request has to
be made by the consumer, it seeks to ensure that the consumer is not pressured
into reducing his/her waiting period. At the same time, it allows consumers who
are sure of their purchase to proceed more quickly. However, stakeholders were
not aware of the practical application of this regulatory choice or of any
impact that could be directly attributable to it.
3.7.        Right of early repayment and creditor’s compensation
(Art. 16(4))
Seventeen
Member States (Austria, Croatia, Cyprus, Finland, France, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Slovakia,
Slovenia and United Kingdom (all jurisdictions)) have transposed Article
16(4)(a) concerning the creditor’s right to compensation for early repayment on
condition that the amount of the early repayment exceeds the threshold defined
by national law.
Nine
Member States (Bulgaria, Cyprus, Denmark, Lithuania, Luxembourg, Malta, Netherlands, Spain and United Kingdom (only Gibraltar)) have transposed Article 16(4)(b)
concerning the creditor’s right exceptionally to claim higher compensation for
early repayment.
Five
Member States (Cyprus, Lithuania, Luxembourg, Malta and United Kingdom (Gibraltar)) have made use of both options.
Stakeholders
tend not to be aware of any impact which could be directly attributable to the
regulatory choices set out in Article 16(4)(a) and (b). In general, these
impacts are likely to be limited as the vast majority of consumer credit
arrangements in Europe are of an insufficiently high value to trigger the
credit providers’ right to claim compensation according to the threshold
applied by Member States, while some credit providers waive the opportunity to
claim financial compensation for early repayment (despite being legally
entitled to do so), and in some Member States early repayment is relatively uncommon.
Nevertheless,
in the majority of Member States that have taken up the regulatory choice under
Article 16(4)(a), it is considered to have had a positive impact on
consumer protection and/or the internal market, particularly as regards the
legal clarity it gives to both credit providers and consumers. In particular,
it is seen as beneficial for consumers in countries where credit providers now
have to meet more restrictive conditions before they can claim any
compensation, and for credit providers in that they are not placed in a
disadvantaged position as a result of early repayment of loans by
consumers. 
4.           Specification of certain concepts contained in the
Directive [16]
The Directive
contains some open wordings to enable MS to adjust to their legal culture and
market situation. The present section has been drafted on the basis of the
Study on the Impact of the Legal Choices of the Member States and other Aspects
of Implementing Directive 2008/48/EC on the functioning of the consumer credit
market in the European Union.
4.1.        The concept of ‘insignificant charges’ with regard to
credit agreements under which the credit has to be repaid within three months
(Art. 2(2)(f))
Article
2(2)(f) excludes from the scope of the CCD credit agreements under the terms of
which the credit has to be repaid within three months and only insignificant
charges are payable. Nine Member States (Belgium, Hungary, Cyprus, Finland, Netherlands, Romania, Slovenia, Spain and United Kingdom) have specified or
clarified this term.
Overall,
the explanation of this concept is considered to have had a positive impact on
both the internal credit market and consumer protection. It has reportedly
helped to protect consumers from unscrupulous creditors trying to circumvent
the CCD; stakeholders believe that in the long term this could improve the
overall relationship between credit providers and their beneficiaries. For
credit providers, the specification of this concept ensures legal clarity. It
allows for more effective enforcement and monitoring of their activities. In
some Member States stakeholders were unable to identify any impact attributable
to the clarification of the concept, either because the concept was specified
in pre-CCD legislation or because the number of credit agreements that are
covered is relatively small.
4.2.        The concept of ‘in good time’ with regard to the
provision of pre-contractual information (Art. 5(1) and 6(1))
Articles
5(1) and 6(1) require the creditor or credit intermediary to provide the
consumer with pre-contractual information in good time before he or she is
bound by any credit agreement or offer. Six Member States (France, Lithuania, Netherlands, Romania, Sweden and United Kingdom) have specified or clarified what
‘in good time’ means. The transposing legislation of some Member States, only
refer to the provision of information "before" being bound or
concluding the contract.
In
general, the clarification of the concept is said to have had slightly positive
impacts on consumer protection. For instance, Swedish consumers now have
enough time to familiarise themselves with the information and to consider it
(the preparatory works mention that different consumers might need different
amounts of time to familiarise themselves with the conditions in the
agreement). On the other hand, some stakeholders question the extent to which
online credit providers can and do actually comply with this requirement.
4.3.        The concept of ‘adequate explanations’ and the provision
of assistance by creditors or credit intermediaries to the consumer (Art. 5(6))
Article
5(6) requires creditors and credit intermediaries to provide adequate
explanations to the consumer, in order to enable the consumer to assess
whether the proposed credit agreement is adapted to his/her needs and financial
situation. Member States may adapt the manner in which and the extent to which
such assistance is given, as well as by whom it is given. Eight Member States (Austria, Hungary, Italy, Netherlands, Poland, Slovenia, Sweden and United Kingdom) have specified or
clarified what the concept of ‘adequate explanations’ means.
As to
positive impacts, stakeholders in Hungary have indicated that the specification
of this concept has made it easier for authorities to monitor and check
regulatory compliance (i.e. there is better enforcement). In Italy, stakeholders feel that the pre-contractual information provided to consumers is more
complete and clear as a result of specifying this concept. In addition, the
terms and conditions of consumer credit agreements are said to have become more
transparent and the information more uniform and simple. In terms of negative
impacts, credit providers have pointed to an increase in the administrative
burden faced by creditors and the large amount of information consumers need to
process before making a decision. For some stakeholders, better enforcement is
required as some credit providers’ explanations are still ambiguous. 
On
the basis of complaints and preliminary rulings[17],
the Commission is aware that it is not uncommon that consumers sign contracts
that are ill-adapted to their needs. Therefore, a proper enforcement of
pre-contractual information requirements in general and, in particular, this
provision is very important as a preventive measure.
4.4.        The provision of pre-contractual information for certain
credit agreements by means of the European Consumer Credit Information (SECCI)
form set out in Annex III (Art. 6(1))
Article
6(1) requires the creditor to provide the consumer with the information needed
to compare different offers in order to take an informed decision on whether to
conclude a credit agreement in the form of an overdraft facility and for other
certain specific credit agreements. Such information may be provided by means
of the European Consumer Credit Information (SECCI) form set out in Annex III
to the CCD[18].
Ten Member States (Belgium, Bulgaria, Croatia, Hungary, Ireland, Lithuania, Luxembourg, Portugal, Slovenia and Slovakia) have made the use of the SECCI form
mandatory for those specific credit agreements.
The vast
majority of stakeholders agree that, in general, the SECCI form has had a
positive impact on consumer protection and achieved its intended purpose of
allowing consumers to compare different prices and offers. Mandatory use of the
SECCI form has reportedly reduced the risk of default or non-payment,
facilitated the online credit process and increased transparency and
competition in the internal credit market. That said, some believe that the
benefits of the SECCI form have been moderated by the fact that many consumers
do not have sufficient financial literacy to fully understand the information
provided in the form. In Belgium and Ireland the SECCI form is considered to be
more complicated than the information that was previously being provided to
consumers and, as such, was even perceived as resulting in a low negative
impact in terms of consumer protection. Credit providers generally point to
administrative and operational costs, in some countries without a corresponding
benefit. In any event it seems clear that the SECCI form will become more
effective if it is accompanied by measures aiming to improve the financial
awareness of consumers and compliance with Article 5 (6).
4.5.        The concept of ‘sufficient information’ with regard to
the obligation to assess the creditworthiness of the consumer (Article 8(1))
Article
8(1) requires the creditor to assess the consumer’s creditworthiness on the
basis of sufficient information, where appropriate obtained from the consumer
and, where necessary, on the basis of a consultation of the relevant database.
Two Member States (Belgium and United Kingdom) have specified or clarified what
‘sufficient information’ means.
 The
clarification of this concept has had a positive impact, for example
stakeholders in Belgium say that the obligation on credit providers to register
certain financial products and preserve the results of consultations on
consumers’ creditworthiness has been beneficial for consumers, this is the case
even if ‘complete and correct’ information was already required and obtained
from consumers before the transposition of the Directive. However, there are
concerns regarding the enforcement of this provision (some stakeholders believe
that sufficient information is not always obtained by creditors offering point-of-sale
contracts due to a conflict of interest between selling a good/service and
upholding legal obligations). As a result, consumer creditworthiness is not
always assessed in sufficient detail.  
4.6.        The concept of ‘significant increase’ with regard to the
obligation to assess the creditworthiness of the consumer (Article 8(2))
Article
8(2) requires the creditor to assess the consumer’s creditworthiness before any
significant increase in the total amount of the credit. Three Member States (Bulgaria, Slovenia and Sweden) have clarified what ‘significant increase’ means by adopting a
specific threshold upon which the creditor’s obligation to assess the
consumer’s creditworthiness is triggered.
In
terms of positive impacts, stakeholders in Slovenia take the view that the
specification of this concept has reduced the level of risk for all parties to
the credit agreement and ensures that all consumers are treated equally. In Bulgaria, stakeholders have noted that, in practice, creditworthiness is assessed
regardless of the percentage specified in the legislation and, as such, this
clarification has not necessarily changed the status quo. In Sweden, stakeholders were generally unaware of the clarification of ‘significant increase’
and, as such, could not provide information on its impact.
4.7.        The term ‘significant overrunning’ (Article 18(2))
Article
18(2) requires creditors to provide consumers with certain information, without
delay, on paper or on another durable medium, in the event of a ‘significant overrunning’
exceeding a period of one month. Three Member States (Belgium, Romania and  United Kingdom) have specified what constitutes a ‘significant overrunning’ (Belgium and Romania by adopting specific thresholds).
The
specification of this term is considered to have a positive effect on consumer
protection in Belgium (due to the legal clarity for both the creditor and
consumer which facilitates regulatory compliance, and also due to the
psychological barrier established by the specified amount that an overrunning
may reach) and in Romania (due to the simplicity and legal clarity associated
with a quantitative figure provided for by national law, which is particularly
beneficial for consumers with lower levels of financial literacy).
5.           Relevance to the consumer credit markets of thresholds
as set out in Article 2(2)(c)and thresholds and percentages used to calculate
the compensation due for early repayment[19] 
Article
2(2)(c) limits the scope of the Directive to credit agreements involving a
total amount of credit of more than EUR 200 and less than EUR 75 000[20].
The survey of stakeholders does not give a clear answer as to the relevance of
those thresholds.
While
responses from the national lenders’ associations suggest that the lower
threshold is important in allowing lenders to provide small loans at low cost,
the majority of consumer protection bodies are in favour of removing the
thresholds. Those consumer protection bodies which do not advocate removing the
thresholds are mostly from Member States applying the CCD to consumer credits
regardless of their amount. The lender survey on the other hand suggests that
some lenders would like to see the lower threshold raised and the upper
threshold reduced. However, two lenders are in favour of increasing the upper
threshold. 
As to
the thresholds for compensation on early repayment, the few stakeholders
replying did not mention any impact on their respective credit markets. As to
percentages of compensation, no feedback was received.
6.           The
Directive’s impact on consumer credit markets[21]
6.1.        Size of the consumer credit market
In
the wake of the financial crisis, households have been reducing their consumer
credit debt and lenders have tightened up their lending criteria, and
outstanding consumer credit debt has dropped from 9.1 % of GDP in 2009 to
8.2 % at the end of 2011. Behind this aggregate picture[22]
lies a great deal of variation in the extent of consumer credit in the EU, with
the average amount outstanding at the end of 2011 ranging on a per capita basis
from EUR 212 in Lithuania to EUR 4 111 in Cyprus. Cyprus also has the highest proportion of consumer credit to GDP (19 %), followed by Greece (15 %), Hungary (14 %), United Kingdom (14 %), Bulgaria (12 %), Romania (11 %),  Ireland (11 %) and Poland (10 %). The lowest proportion occurs in Lithuania, Luxembourg, Estonia and Latvia, which have less than 5 %.
Despite
the large cross-country variations, there is also evidence that, over the
period 2000-2011, the level of consumer credit outstanding on a per capita basis
has been converging, albeit at a slow rate. That is to say, consumer credit per
capita is rising more quickly in Member States with previously low levels of
consumer credit than in Member States where levels of consumer credit are
already high.
Consumer
credit denoted in a foreign currency represents an additional risk for
consumers, and is common in some Member States, usually outside the euro area.
For instance, the ratio of consumer credit denoted in foreign currency to total
consumer credit has been steadily increasing in Lithuania, from only 3 %
in early 2004 to 45 % at the end of July 2012. Austria is the only euro
area Member State which reports any foreign currency consumer credit. However,
a large proportion of the foreign currency credit is composed of home equity
loans, i.e. consumption loans secured by mortgages common in many Eastern and Central European Member States, or by residential loans. The ratios are also fluctuating
because of changes in exchange rates.
In
times of financial crisis, the overall value of consumer credit in several
Member States has been falling in recent years. While this has coincided with
the dates of adoption and implementation of the CCD, a large majority of the
respondents to the lenders’ survey[23]
indicated that they did not perceive CCD adoption and transposition as
affecting the volume of new credit granted by them. Nonetheless, a number of
lenders indicated that the CCD had influenced the new credit they granted for
domestic currency credit. Among those who did see an impact, some were positive
about it but others took a negative view.
6.2.        Structure of the consumer credit market and range of
credit products available on national markets
The
surveys of regulators and national lending associations asked for a list of the
largest providers of consumer credit not secured by real estate property,
broken down into credit institutions and specialist lenders. The information
gathered through these surveys is incomplete and an absence of information on
specialist lender activity should therefore not be interpreted as a sign of
weak specialist lender activity. The relative importance of credit institutions
(i.e. banks) and specialist lenders in the provision of consumer credit varies
across the EU. The results from the consumer survey[24]
suggest that specialist lender activity is the highest in Italy, Sweden and United Kingdom.
No
reliable data on market concentration in the consumer credit market are
available at the present time and responses from regulators and national lender
associations did not provide any further insight into this question. On the
basis of European Central Bank (ECB) data[25], Estonia, Finland and the Netherlands have market concentration levels which can be considered as
high. There appears to be no common development in market concentration over
time: market concentration fell in Estonia but rose in Finland and Netherlands. Similarly across all other Member States, there appears to be no common
trend in market concentration and the overall EU average index rose slightly,
yet remains competitive.
All
regulators who gave the range of domestically provided credit products
available on their national market (10 out of 20)[26]
say overdrafts are either common or very common in their respective countries,
and are provided mostly domestically and in the domestic currency. The same is
true for credit cards and personal loans. However, it should be noted that the
definition of credit and charge card is not necessarily the same in all
countries. For example, in France deferred debit cards are often referred to as
credit cards.
In
terms of number of credit products available on each domestic market, the
Slovakian regulator lists 19 (out of 20) credit products as being either common
or very common and the regulator from United Kingdom lists 16 as common or very
common. The smallest number of products provided is found in Germany and Luxembourg, where the regulator notes only seven and eight types of credit as common or
very common respectively.
Loans
from specialist lenders (in general) are only listed as common or very common
by lender associations from United Kingdom. Similarly, payday loans from
specialist lenders are common or very common in United Kingdom. A Hungarian
lending association also states that foreign currency denoted payday loans,
provided by foreign institutions, are common in Hungary.
6.3.        Reliance on consumer credit in the EU 
The
reliance on credit to finance consumers’ day-to-day needs can be measured by
the ratio of the flow of credit to household expenditure. Such a ratio
indicates what fraction of yearly expenditure is financed by credit. If
consumers’ credit repayments amount to more than what they take out in new
credit, this ratio can also be negative, indicating that consumers have reduced
their outstanding stock of debt. The reliance on consumer credit varies
significantly between Member States.
With
the exception of Germany, all Member States were increasing consumer credit
relative to household expenditure prior to the onset of the financial crisis. After
2007, consumers in several Member States reduced their reliance on credit, most
notably in Ireland (-1.4 %), Spain (-1.3 %) and United Kingdom (-1.2 %). Germany and Slovakia are the only two Member States in which
the reliance on consumer credit was higher after 2007 than before.
6.4.        Provision of cross-border credit 
Only
11 out of the 20 responding regulatory bodies have provided general data on
credit issued in their countries and, importantly, the share of cross-border
credit has only been included by three respondents. Respondents to the survey
stated that cross-border credit is of no relevance in their country or that the
volume of cross-border credit issued is negligible. Only six out of 50 lenders
who responded to the survey stated that they do engage in cross-border lending.
Three of these respondents say that their cross-border lending is done through
branches, two through subsidiaries and one through direct lending. The average
percentage of cross-border credit out of the total volume of credit is 1.43 %
among those who provided data.
According
to the consumer survey, cross-border borrowing is relatively infrequent among
consumers, yet significantly more common than previous studies have suggested
(roughly 5 %). There is a wide dispersion of cross-border borrowing across
Member States. While in Austria it is close to zero (0.2 %), in Slovakia
institutions from other Member States issued around one in four (23 %) of
the most recent credit products held by borrowers[27].
Higher income earners are more likely to borrow from a lender from another Member State.
Regarding
possible obstacles to cross-border credit provision and borrowing, most lenders
did not indicate what type of barriers had hindered them from accessing another
EU consumer credit market, although some of them indicated that the lack of
access to good-quality credit information was a barrier to entry or that their
product was unsuitable for cross-border offer. Other responses included
‘liquidity’, ‘compliance in the instigation of legal actions if need arises’,
‘cost of funding differential between different countries’, ‘difficult to
recover outstanding amounts through litigation’, as well as ‘cultural and
linguistic barriers’.
6.5.        Difference in price of comparable credit products within
and between countries 
According
to ECB data, the APR fell from 2009 to 2013 in all but seven Member States
(Slovakia, Hungary, Estonia, Latvia, Lithuania, Czech Republic and Bulgaria),
with the sharpest decline (3.2 percentage points) in Romania. Unfortunately, it
is not possible to assess whether the Directive had any impact on the APR
charged as the transposition coincided with the financial crisis.
The
cost of consumer credit varies markedly across countries. For example, APR
ranges from 6 % or less in a number of euro area countries to up to 35 %
in a number of Member States from Central Europe. However, the financial crisis
has resulted in a sharp reduction of central banks’ interest rates throughout
the EU. Over the period 2003-2012 a convergence of consumer interest rates (net
of central bank rates) among the EU countries appears to have taken place at a
reasonable speed. 
The
analysis of APR differences between and within countries’ comparable credit
offers draws on the hard-copy advertisements which were gathered by mystery
shoppers and the web-based advertisements which were collected by London
Economics. Overall, 80 % of all advertisements collected showed the APR.
The
most expensive offers were found for personal loans advertised by specialist
lenders with an APR averaging 80 %. This is unsurprising given that
specialist lenders often provide very short-term loans which carry a high
interest rate. It was found that offers advertised with more completely
disclosed information are cheaper.
The
APR incorporates all costs associated with the credit, including the borrowing
rate, but also including all other fees and charges. The difference between the
APR and the borrowing rate is therefore a measure of how much in additional
charges the consumer has to pay. Ireland and  the United Kingdom stand out as
having the largest difference between APR and borrowing rate, while in Iceland
and Luxembourg all advertisements analysed include borrowing rates which are
identical to the APRs stated. Across the EU, personal loans exhibit in general
terms the largest difference (almost 7 percentage points) between APR and
borrowing rate, while car loans and deferred payments account for the smallest
difference of 2.5 and 3.8 percentage points respectively.
7.           The Directive’s impact on consumer protection[28]
Before
looking at how lenders fulfil the obligations imposed by the Directive, it is
important to note that, according to the surveyed regulators, all or at least
the majority of lenders are aware of their general obligations. Half of the
regulators also indicated that they had not taken any enforcement action with
regard to lenders’ non-fulfilment of their obligations. Only 20 % of the
surveyed regulators had to do so in 2010 and 2011. It should be noted, however,
that only 70 % of regulators checked whether lenders actually fulfil their
obligations towards their customers.
7.1.        Fulfilment of informational requirements at
advertisement stage 
Under
Article 4, advertisements for consumer credit products must disclose all relevant
information in the form of a representative example. This requirement does not
apply to advertisements that omit all cost information and, in some Member
States, to advertisements that only display the APR. For this reason, in the
following analysis we consider only those advertisements that report any
borrowing cost other than the APR; since there are different informational
requirements for different types of consumer credit, the level of compliance
has to be analysed separately for each type of credit. Within the analysed
sample, only 22 % of advertisements displaying some sort of financial
information fulfilled all the informational requirements. While in some
countries all the advertisements for certain products met the informational
requirements, this was not the case in other countries. Comparing different
types of advertisements, those for credit cards were by far the worst in terms
of completeness of information and advertisements for car loans stood out as
the best.
Article
4 also requires standard information to be disclosed in a clear, concise and
prominent way. The analysis of advertisements showed great variability in terms
of clarity across Member States and consumer credit products. Comparing how
advertisements fared, the Netherlands ranked in the top five countries under
each of the criteria for standard information. Over all four types of consumer
credit, the average score was 5.5 out of 8. For car loans the range is the
largest with Estonian advertisements being the most unclear and earning on
average just one out of eight points. An equally low score is observed only for
deferred payments in Bulgaria. Again, advertisements from the Netherlands do consistently well and score highest for both credit cards and personal
loans. However, no Member State achieves a perfect score of eight out of eight.
Overall,
regardless of type of lender, type of credit or medium of reaching consumers,
many advertisements do not conform to several requirements of the Directive and
this makes the comparison of offers unnecessarily complicated for consumers.
This situation indicates a need to improve enforcement on this issue.
7.2.        Fulfilment of informational requirements regarding APR
and the representative example
Overall,
only 73 % of all advertisements which show borrowing costs have included a
representative example. Credit card advertisements are particularly poor in
this respect. Many of them state the annual card fee, yet fail to provide a
representative example. Since annual fees are a component of the borrowing cost
for consumers using a credit card, these advertisements should have included a
representative example.
However,
several Member States have an excellent record with 100 % of
advertisements in a particular category including a representative example. For
the purpose of the assessment on those advertisements which included a
representative example as well as all the necessary information, the simulator
available on the Commission’s website[29]
was used to compare the results with the APR stated in the representative
example. For slightly less than half of all advertisements that provided enough
information to calculate the APR, the APR obtained using the simulator did not
match the APR reported in the advertisement. The average difference between stated
and simulated APRs was 0.35 percentage points. In Austria, Ireland, Luxembourg and the Netherlands, all APRs analysed matched those calculated according to the
simulator and all the information required to reproduce the APR was provided in
the representative example.
7.3.        Fulfilment of informational requirements at
pre-contractual stage
Is the
information full and correct?
Article
5 outlines the type of pre-contractual information the creditor must give the
consumer in good time before the consumer is bound by a credit agreement or
offer. This information is intended to help the consumer to make a
well-informed decision by being able to easily compare several credit offers.
According to Article 5, all pre-contractual information requirements are satisfied
if the consumer obtains the SECCI form.
Getting
access to offers was the major difficulty encountered during the mystery
shopping exercise. In a number of countries the mystery shoppers were asked to
undergo credit checks before they could actually receive detailed information
on the credit they were asking for. This made the selection of mystery shoppers
more challenging, in particular in Germany, Latvia, the Netherlands, Sweden, the United Kingdom and Denmark. Also, in a number of cases the shoppers were
not given any offer because they were available only to the actual customers of
a given lender.
The
majority of mystery shoppers were not informed of their rights as consumers by
the creditors, particularly as regards the right of withdrawal within the first
14 days (on average roughly 11 % were informed of their rights) and the
right to be immediately informed if the credit application has been rejected as
a result of consultation of a database (less than 30 % were informed of
their rights). In 80 % of cases the shoppers did not receive explanations
on how the APR was calculated. Overall, the results of the mystery shopping
exercise show that the CCD pre-contractual information requirements are very
frequently not met, although, on more positive side, only 15 % of mystery
shoppers were not told the level of the interest rate and only 16 % were
not told whether the interest rate was fixed or variable. Finally, even after
prompting, only about half of shoppers received the SECCI form.
Germany and Slovenia are ranked the highest in terms of providing adequate pre-contractual information for car
loans, Poland and Portugal for credit cards and, again, Slovenia and Portugal for personal loans. The lowest ranking countries are Estonia and Luxembourg for car loans. In the case of credit cards, Luxembourg is ranked the lowest,
followed by Denmark. For personal loans, again Denmark is the worst-performing
country. Overall, Estonia, Sweden, Luxembourg, Austria and Denmark are at the bottom of the ranking. There are also clear differences between
different credit products, with credit cards receiving the worst scores.
Explanations:
are the credit providers willing to explain the credit conditions to borrowers?
Provision
of information is not sufficient if it is not presented in a clear and
understandable form and if the creditor is not willing and able to explain the
terms clearly. According to Article 5(6) creditors and where applicable credit
intermediaries shall provide adequate explanations to the consumer. In the mystery
shopping exercise, subjects were asked whether their creditors ensured that
they had all the information necessary to make a decision about the loan or
credit card. The majority of credit providers passed the test for all types of
credit (53-61 %). Nevertheless, for more than half of the countries
considered this is not the case. Malta performs particularly poorly, with only
24 % of mystery shoppers indicating that they felt they had all the
information necessary to make a decision. Cyprus, Italy and Germany are the top-performing Member States (79 %, 77 % and 71 %
respectively).
There
is no clear evidence from the mystery shopping exercise that credit providers
tailor their explanations to borrowers’ needs or level of education. However, a
large proportion of creditors (for all types of credit) do request information
on the prospective borrower’s employment, income and homeowner status.
Around
60 % of respondents to the consumer survey sought information from just
one lender, typically their own bank. Close to 9 in 10 of consumers were of the
view that creditors contacted were open and fair, and that the information
provided to them by lenders was comprehensive and clear. This view, contrasting
with the mystery shoppers’ finding that not all information was provided to
them, seems to prove that an ordinary borrower is not fully aware of the
information that he or she should receive.
The
survey shows that certain demographic characteristics make it significantly
more likely that consumers will be provided with explanations that they ask
for. Women are much more likely to receive explanations, as are the elderly and
those with higher incomes.
7.4.        Objective assessment of consumers’ understanding of the
information disclosed[30]
The
consumer credit market study also looked into the issue of consumers’ financial
literacy. In order to assess consumers’ financial literacy, a reliable and
objective measure is needed. Unlike for other forms of literacy, there is at
present no standardised and generally accepted test for assessing the level of
financial literacy.
To
assess their level of financial literacy, respondents to the consumer survey
were asked to evaluate which of two credit offers was cheaper based on interest
rate and APR information in order to test whether they were aware of the
definition of APR and its relationship to the interest rate. Fewer than 40 %
of respondents provided the correct answer, objectively suggesting that many
consumers do not have an understanding of the information disclosed to them on the
APR (and its relation to the interest rate). This result demonstrates that 60 %
of consumers essentially do not understand what an APR is and how to use it,
and suggests that their level of financial literacy is rather low.
The
existence of the rights allowing consumers to make early repayment and to
withdraw from a contract within the first 14 days of signing the agreement is
important, yet consumers also have to be aware of these rights in order for
them to have the desired effect. If consumers are not aware of these rights,
they may falsely assume that they are locked into a contract from the moment of
signing the agreement to the stated end date. This would greatly undermine
consumer empowerment, consumer protection and market competition. Awareness of
the rights of early repayment and withdrawal varies according to
socio-demographic characteristics. As expected, those respondents who are more
financially literate are also more likely to know of either right. Respondents in full-time employment were
also more likely to know of their right of early repayment, yet not of their
right of withdrawal.
Consumers’
awareness of the financial details of their own credit contracts is uneven. 64 %
of surveyed borrowers knew whether the APR was mentioned in their contract,
while 84 % were aware of the type of interest rate (i.e. fixed or
variable) and 74 % knew whether early repayment might incur a penalty. In
terms of awareness of the rights of early repayment and withdrawal within the
first 14 days of signing a contract, 73 % and 71 % of consumer survey
participants respectively were aware that creditors have to provide
pre-contractual information on these rights, although the level of awareness
varies considerably across Member States.
7.5.        Right of withdrawal and right to make early repayment
How often do
consumers withdraw from credit contracts within the legal deadline?
Article
14 stipulates that consumers have to be given a period of 14 calendar days in
which they can withdraw from the credit agreement without giving any reason.
Particularly in the light of aggressive marketing and sales tactics, this
period of reflection offers important protection to consumers. Further, it
helps to improve market competition as consumers can still opt for a more
competitive offer during the first 14 days of signing a credit contract.
According
to the consumer survey, only a small number of borrowers –around 1 % –
attempt to withdraw within the 14-day period after signing. Of those, 42.2 %
were unsuccessful. It is important to keep in mind that some respondents may
have signed their contracts prior to the introduction of the Directive.
How often do consumers repay early and what is the
impact of the application of compensation on willingness to repay early?
Article
16 states that the consumer is entitled to ‘discharge fully or partially his
obligations under a credit agreement’. The benefit of this right is once again
twofold: First, it offers increased consumer empowerment and protection,
allowing consumers greater freedom in managing their finances. Second, it is an
important component of a competitive credit market, allowing consumers to
switch contracts if a better credit offer becomes available elsewhere.
There
is mixed evidence on how frequently consumers repay their credit agreements
early. While both lenders and consumer associations report this to be rather
infrequent, the consumer survey has shown that close to one quarter of all
respondents have attempted to repay early, of which 86 % were successful.
However, these aggregate numbers disguise a large variance between Member States and types of consumer credit. There is also strong evidence from the consumer
survey that respondents who are more financially literate and younger are more
likely to repay early.
7.6.        Satisfaction, problems and complaints
According
to the consumer survey, 9 % of all consumers have faced problems with a
credit agreement or a creditor in the last five years. However, the results
suggest that there is a large amount of cross-country variation. In terms of
socio-demographic characteristics, older respondents were found to be
significantly less likely to have faced any problems in relation to their
credit agreements. Overall, the majority of complaints appear to be about
charges, right of withdrawal and right to make early repayment.
However,
only one third of the consumers who faced problems said that they complained.
There are several procedures for resolving consumer problems, either through
third parties, such as consumer protection bodies and ombudsmen, or
directly through the creditor. On average, 41 % of the problems raised
with creditors were solved while 28 % of the problems raised with third
parties were resolved. Out of every 20 consumers whose problem was only partly
resolved, only 8 took further action.
Overall,
there is some evidence that consumer satisfaction with the information provided
and with the rights of early repayment and of withdrawal has increased. In
particular, lenders, consumer protection bodies and ombudsmen are observing improvements
in satisfaction. Consumer associations say that they have not noted any
improvements in consumer satisfaction with the exception of one association
which has noted an improvement in relation to the right of withdrawal. Lenders
and lender associations are in agreement that satisfaction has risen. The
survey found fairly high consumer satisfaction with the service received in
respect of their current loans (73 % completely satisfied) and with the
scope for direct contact with the provider of the loan (66 %), but a much
lower level of satisfaction with the fees (36 %) and with the choice of
offers (48 %). Positive resolution of complaints has a significant impact
on consumers’ satisfaction with creditors’ service.
8.           Conclusions
It
should be kept in mind that some Member States implemented the CCD after the
stipulated deadline, and some of them implemented it at the end of 2011.
Therefore, creditors and consumers had little time to adapt their behaviour and
to fully reap the benefits of the CCD. This explains why it has been difficult
to identify the impact of the regulatory choices exercised by the Member
States.
Furthermore,
the implementation of the CCD has coincided with the financial crisis, which
impacted the consumer credit market. Creditors are more cautious about lending
and borrowers prefer to pay back their existing loans instead of contracting
new ones. The understandable reaction to those external circumstances has
limited the potential impact the CCD could have on cross-border lending and therefore
on further integrating the Single Market for credit.
The
mystery shopping exercise showed that several provisions of the CCD are not
being respected by creditors. This applies to advertisements and
pre-contractual information, and fulfilment of the obligation to inform
consumers about their rights (particularly in respect of right of withdrawal
from the contract within the first 14 days and early repayment). The mystery
shopping exercise confirms the results of the sweep carried out in September 2011.[31] The
consumer survey showed that consumers encounter problems when exercising those
rights. Consumers’ financial awareness remains insufficient. In addition, they
have limited knowledge of their rights and of the provisions contained in
contracts. In that respect, it is important to ensure that credit providers
tailor their explanations to borrowers’ needs or level of education. 
At
this stage, there seems to be no need to modify either the scope of the
regulatory choices or the thresholds and percentages applied in accordance with
the CCD. Research has revealed some possible misunderstanding as to the degree
of choice the Member States could have in applying the CCD. The Commission will
work with the Member States to clarify this. 
However,
in order to be effective, the guarantees laid down in the CCD require proper
enforcement. In light of Article 22, which obliges Member States to make sure
that the national provisions implementing the CCD cannot be circumvented,
attention must also be given to practices and legal constructions aiming at
circumventing the national rules implementing the CCD and consumer law at
large.
In conclusion, there is a need to
continue monitoring the enforcement of the CCD in the Member States, starting
with an assessment of the supervisory practices by Member States. The
Commission intends to carry out such an assessment in 2014. Furthermore,
building on the results of the evaluation of the information campaign on CCD
carried out in some Member States and other evidence including on the behaviour
of consumers, the Commission may consider further activities in the area of
financial awareness.
[1]               Council
Directive 87/102/EEC of 22 December 1986 for the approximation of the laws,
regulations and administrative provisions of the Member States concerning
consumer credit (OJ L 42, 12.2.1987).
[2]               Directive 2008/48/EC of the
European Parliament and of the Council of 23 April 2008 on credit agreements
for consumers 
(OJ L 133/66 22.5.2008).
[3]               Commission
Directive 2011/90/EU of 14 November 2011 amending Part II of Annex I to
Directive 2008/48/EC of the European Parliament and of the Council providing
additional assumptions for the calculation of the annual percentage rate of
charge.
[4]               Study
on the functioning of the consumer credit market in Europe, carried out by
IPSOS and London Economics.
[5]               Study on the Impact of the
Legal Choices of the Member States and other Aspects of Implementing the
Directive 2008/48/EC on the Functioning of the Consumer Credit Market in the
European Union, Final Report - September 2013 prepared for the Executive Agency
for Health and Consumers by Risk & Policy Analysts Limited. The study is
included in the country-specific reports and in the horizontal Final Report
covering analysis of the situation across the European Union and drawing on the
country-specific information and assessments.
[6]               This
section is based on the findings of  the Study on the Impact of the Legal
Choices of the Member States and other Aspects of Implementing the Directive
2008/48/EC on the Functioning of the Consumer Credit Market in the European
Union, prepared for the Executive Agency for Health and Consumers by Risk &
Policy Analysts Limited.
[7]               It is
important to recognise that the methodology adopted for the above study, namely
assessment of impacts based on literature review and stakeholder consultation
(online survey and telephone interviews involving public authorities, credit
providers, consumer representatives, research institutes, industry associations
and complaint-gathering bodies), the extent of information obtained from
consultation and the findings of the analysis of the impacts of the regulatory
choices as set out by the CCD determine the extent and nature of the
information referred to within the present report. It has to be noted that
where impacts of the regulatory choices on the internal credit market have been
identified, this is on the basis that — even if these impacts have been, in
some cases, identified in a domestic market — they are likely to affect other
EU countries, cross-border aspects or at least the interfaces between national
markets and the EU market as a whole. Finally, it is worth noting that the
nature of the findings of the study did not easily yield to an analysis of
quantitative impacts.
[8]               This view was expressed by public
authorities, consumer protection bodies and credit unions across the countries
that exercised this regulatory choice.
[9]               Bringing
credit unions under the scope of application of all provisions of the CCD in Ireland resulted, according to credit providers, in an uneven playing field when compared with
similar organisations in some other countries where the exception under Article
2(5) of the CCD has been applied (e.g. United Kingdom).
[10]             Some
stakeholders had difficulty in disentangling or differentiating between the
impacts of the regulatory choice and the impacts of the fact that Article 2(6)
refers to credit agreements which provide for arrangements to be agreed by the
creditor and the consumer in respect of deferred payment or repayment methods.
It was understood by some stakeholders that the existence of this type of
contract in a national legal system is a consequence of the regulatory choice
although the regulatory choice under Article 2(6) is not itself intended to
introduce this type of contract into national legal systems.
[11]             This view was expressed by public
authorities and credit providers.
[12]             Fifteen
Member States (Austria, Belgium, Cyprus, Estonia, Greece, Finland, France, Hungary, Italy, Latvia, Lithuania, Portugal, Romania, Sweden and Slovenia) specify that the APR should be provided in advertising, pre-contractual
information and in the actual credit agreement for credit agreements covered by
Article 2(3).
[13]             Overdraft
debt appears to be common in Germany, Cyprus, Slovenia and Netherlands.
[14]             This view was expressed by many different
types of stakeholders, including credit providers, industry associations and
consumer organisations.
[15]             This
view was mostly expressed by consumer organisations/representatives, but also
industry associations, credit providers and public authorities.
[16]             The
wording ‘have specified or clarified’ used in the present section of the Report
relates to the specification drawn up in Member States under the relevant law, explanatory
memorandum to the law, the legal preparatory works, explanatory notes and
similar documents explaining the meaning of the concepts used in the CCD. As to
the identified impacts of the clarification of terms/concepts, any impacts
relating to the internal market actually refer to the domestic credit markets. 
[17]             See, for instance, Case C-76/10 Pohotovost' s..r.o. ./.
Iveta Korčkovská, in particular paragraphs 23- 25.
[18]             Such information shall be provided by means of the
SECCI for other types of credit according to Article 5(1).
[19]             The
present section has been drafted on the basis of the "Study on the
functioning of the consumer credit market in Europe", carried out by IPSOS
and London Economics.
[20]             In the
future credit agreements the purpose of which is the renovation of a
residential immovable property involving a total amount of credit above EUR
75000 will fall within the scope of Directive 2008/48/EC as amended by the
Directive on credit agreements relating to residential immovable property (OJ
L60 28.2.2014).
[21]             The
present section has been drafted on the basis of the "Study on the
functioning of the consumer credit market in Europe", carried out by IPSOS
and London Economics.
[22]             The
data come from an ECRI database, which in many countries does not cover
creditors that are not monetary financial institutions (banks taking deposits).
Thus the actual size of the consumer credit market is underestimated.
[23]             Carried
out by Ipsos and London Economics in their ‘Study on the functioning of the
consumer credit market in Europe’.
[24]             Carried
out by Ipsos and London Economics.
[25]             Concentration measured by
Herfindahl Hirschman Index, based on the total assets of banks .
[26]             These
are: the Czech Republic, Belgium, Estonia, Germany, Luxembourg, Lithuania, Portugal,  Slovakia, Sweden and United Kingdom.
[27]             It is however possible that
some respondents misunderstood the notion of cross-border credit, classifying
as such loans provided by the banks registered in their country, but having a
foreign name, or credit extended in foreign currency.
[28]             The
present section has been drafted on the basis of the "Study on the
functioning of the consumer credit market in Europe", carried out by IPSOS
and London Economics.
[29]             http://ec.europa.eu/consumers/index_en.htm
[30]             Based on a survey carried out
in the framework of the consumer credit market study.
[31]             For
more details on the results see: http://europa.eu/rapid/press-release_IP-12-6_en.htm