Evaluation of Directive 2008/48/EC of the European Parliament and the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC
Date: 2019-05-16
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: consumer



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Evaluation of the Consumer Credit Directive (Directive 2008/48/EC)


Summary report - public consultation





EUROPEAN COMMISSION


Directorate-General for Justice and Consumers (DG JUST)


Table of Contents


1
   Introduction
   


2
   Who replied
   1


3
   Overview of responses
   2


3.1
   Overview of responses from the general public
   2


3.2
   Overview of responses from other stakeholders
   4



1Introduction


The public consultation on the evaluation of the Consumer Credit Directive (CCD) ran between 14 January and 8 April 2019.


The objective of this consultation was to obtain the views of citizens and relevant stakeholders on the effectiveness of the CCD. These views feed into the evaluation of the Directive, which started in June 2018 with the publication of the Evaluation and Fitness Check Roadmap and which will be finalised by the end of 2019. The public consultation questionnaire was tailored to two main categories of stakeholders, respectively Part I and Part II: the general public (i.e. consumers), and stakeholders who are involved in the implementation of the Directive or who have detailed knowledge of the functioning of the different elements of the Directive and their impact on the consumer credit market.


The consultation was available and respondents could reply in any of the 24 official EU-languages.



2Overview of the respondents


The public consultation received 234 overall responses, the majority of which came from EU citizens (108), followed by business associations (37) and companies/business organisations (35). Other respondents included public authorities (24), consumer organisations (12), NGOs (6), non-EU citizens (3), academic/research institutions (2) and others (7). 


Figure 1.Profile of respondents







Most of the responses came from EU countries, notably from Romania, Belgium and Germany (see 

Figure 2

).




Figure 2.Country of origin of responses (overall)







3Overview of responses


4Overview of responses from the general public


Part I of the public questionnaire is focussed on the personal experience of consumers trying to obtain a loan and/or their experience having obtained one. 


5General information about the credit obtained 


The majority of respondents having or having had credit opt/opted for credit cards, personal credit and/or an authorised overdraft, as shown in 

Figure 


3

.


Figure 3.Answers to "Do/did you hold or have you tried to obtain any of the following credits (i.e. loans not secured by a collateral like mortgages), of a value between EUR 200 and EUR 75 000 in the past five years?"







6Cross-border credit


Almost all respondents had obtained credit in the Member State where they reside (93% or 112 out of 120 responses) and had not tried to obtain credit in a different Member State (85% or 101 out of 119 responses). 


7Consumer credit advertising


Regarding consumer credit advertising, most respondents had come across advertising for credit online, followed by print media and television (see 

Figure 


4

). Almost half of the respondents felt that the advertisements did not contain enough information (44% or 52 out of 117 responses). 


Figure 4.Responses to "Have you ever come across advertising from consumer credit?"







8Pre-contractual information


During their contact with the credit provider, around a third of respondents were only presented one type of credit, while another third received explanations about the type of credit best suited to their situation.


Only half the respondents were aware that the lender needed to provide them with the Standard European Consumer Credit Information (SECCI) form in “good time” before the signature of the contract (see 

Figure 


5

). 


Figure 5.Answers to "Do you remember when precisely you received the SECCI related to the last credit you have obtained?"









9Annual Percentage Rate of Change (APR)


A large majority of respondents were familiar with the APR (87% or 103 out of 118 responses) which represents the total cost of the credit to the consumer, expressed as an annual percentage of the total amount of credit. 


10Creditworthiness assessment


In the majority of cases, the creditworthiness of those requesting the credit was checked (68% or 80 out of 117 responses). The main type of information that was requested from respondents pertained to their: income, professional status, household composition and other outstanding credits, as shown in 

Figure 


6

 below. 


Figure 6.Answers to "What type of information were you asked (orally or in writing) about?"







11Rights of withdrawal and early repayment


The right of early repayment has been used by around one fourth of the respondents (27% or 32 out of 117 responses). Over 80% of the respondents stated that they had not attempted to withdraw from the contract within the 14-day withdrawal period, nor had re-arranged the schedule or amounts of the repayments, or changed the type of interest rate. 


12Benefits of the Consumer Credit Directive


Respondents were overall very positive about the different provisions of the CCD, with the vast majority finding the provisions of the CCD somewhat beneficial or even very beneficial (see 

Figure 


7

, overall 90% of satisfaction on average). 


Figure 7.Answers to "How would you rate the benefits flowing from the various provisions of the Directive?"







13Overview of responses from other stakeholders


Respondents to Part II of the public consultation other than those answering as the general public belonged to four main groups: industry representatives (i.e. business organisations and business associations, overall 72), public authorities (24), consumer organisations and other civil society representatives (i.e. NGOs, overall 18), and others (e.g. academia and research organisations, 2)
1
. 


14Relevance


A great majority (from 75 to 93%, depending on the issues) of respondents assessed positively the relevance of the CCD, especially concerning the obligation to perform creditworthiness assessments, the rights of early repayment and withdrawal, and the APR (see 

Figure 


8

). 


Figure 8.Answers to "How relevant do you consider the following provisions of the Directive in light of its objectives?"







15Effectiveness


Overall, a majority of respondents (from 52% to 82%) consider the CCD to be effective in relation to its main features, with the exception of the information provided to consumers in advertising (see 

Figure 


9

). 





Figure 9.Answers to "How do you rate the effectiveness for consumer protection of the following elements/ features of the Directive?"







16Efficiency


The main benefits of the CCD highlighted by stakeholders are the higher standard of consumer protection – as a result of, for example, the prevention of over-indebtedness - and the standardisation and harmonisation across Member States of provisions, such as the rights of withdrawal and early repayment (see 

Figure 1


1

). 


Figure 10.Answers to "How would you rate the benefits flowing from the various provisions of the Directive?"







Asked to assess whether the benefits outweigh the costs linked to the implementation of the CCD, a majority of respondents (56% or 53 out of 94 responses) answered positively, claiming that the increased levels of consumer protection and transparency are greater than the costs incurred. 



17Coherence


The CCD perceived as coherent with the main relevant pieces of EU legislation by a majority of stakeholders, with positive answers ranging between 51% to 73% of responses. 


18EU added value


The overall perception of stakeholders is that the added value of the CCD lies in the increase of the level of consumer protection (79% or 75 out of 95 responses). Nearly all respondents believe that most of the key topics covered by the CCD should remain regulated at EU level (see 

Figure 1


1

). 


Figure 11.Answers to "Should the following different aspects remain regulated at EU level?"







19Other issues that should be covered by the Consumer Credit Directive


To conclude, stakeholders were asked to mention any other issues that might require action at EU level. Issues mentioned across the different groups of stakeholders were:


ŸGold-plating practices and different rules across Member States prevent a level playing field for creditors located in different Member States, and, according to industry representatives, these matters have increased compliance costs. These different rules across Member States are also perceived to hinder access to cross-border credit by some stakeholders. 


ŸBroaden the scope of application of the CCD, especially to cover loans of less than EUR 200 and credit providers and intermediaries currently providing similar services (e.g. peer-to-peer lending, overdraft facilities, etc.).   


ŸStrengthen enforcement of the Directive to address non-compliance. 




ŸStreamline rules and adapt them to developments in the consumer credit market linked to digitalisation, notably in the area of information disclosure. 


ŸBroaden the scope of the CCD to cover peer-to-peer lending and crowdfunding.






(1)


 See footnote 1 concerning the members of the general public that answered to section II of the consultation.