CELEX: 51984PC0342
Language: en
Date: 1984-06-13
Title: AMENDED PROPOSAL FOR A COUNCIL DIRECTIVE RELATING TO THE APPROXIMATION OF THE LAWS, REGULATIONS AND ADMINISTRATIVE PROVISIONS OF THE MEMBER STATES CONCERNING CONSUMER CREDIT

No C 183/4                          Official Journal of the European Communities                             10.7.84
                                                            II
                                                    (Preparatory Acts)
                                              COMMISSION
              Amendments to the proposal for a Council Directive relating to the approximation of the
              laws, regulations and administrative provisions of the Member States concerning
                                                   consumer credit (')
                                                   COM(84) 342 final
              (Submitted by the Commission to the Council pursuant to Article 149 (2) of the EEC Treaty
                                                    on 22 June 1984)
                                                     (84/C 183/05)
                    ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
THE COUNCIL OF THE EUROPEAN                                     THE COUNCIL OF THE EUROPEAN
COMMUNITIES,                                                    COMMUNITIES,
Having regard to the Treaty establishing the                    Having regard to the Treaty establishing the
European Economic Community, and in particular                  European Economic Community, and in particular
Article 100 thereof,                                            Article 100 thereof,
Having regard to the proposal from the Commission,              Having regard to the proposal from the Commission,
Having regard to the opinion of the             European        Having regard to the opinion of the         European
Parliament,                                                     Parliament,
Having regard to the opinion of the Economic and                Having regard to the opinion of the Economic and
Social Committee,                                               Social Committee,
Whereas wide differences exist between the laws in              Whereas wide differences exist between the laws in
force in the Member States of the European                      force in the Member States of the European
Community in matters of consumer credit;                        Economic Community in the field of consumer credit;
Whereas these differences in the national legal                 Whereas these differences in the national provisions
provisions are liable to jeopardize the establishment           of law are inimical to the establishment of a system
of a system which ensures that competition between              which ensures that competition between grantors of
creditors is not distorted in the common market;                credit is not distorted in the common market;
                                                                Whereas these differences of law result in, or are
                                                                otherwise accompanied by, divergent practices in each
                                                                of the 10 national consumer credit markets in the
                                                                European Economic Community; whereas the
                                                                disparities of law and practice result in unequal
                                                                consumer protection in the field of consumer credit
                                                                from one Member State to another;
Whereas these differences lead to disparities in the            Whereas these differences limit the opportunities the
degree of consumer protection in the various Member             consumer has to obtain credit in another Member
States, limit the opportunities the consumer has to             State; whereas they affect the volume and the nature
obtain credit in another Member State, affect the               of the credit sought, and also the purchase of goods
volume and the nature of the credit sought, and also            and services;
the purchase of goods and services;
Whereas, in consequence, these differences have an              Whereas, in consequence, these differences have an
influence on the free movement of goods and services            influence on the free movement of goods and services
obtained on credit and thus hinder the harmonious               obtainable by consumers on credit and thus hinder the
0) OJ No C 80, 17. 3. 1979, p. 4.
 ---pagebreak--- 10.7.84                             Official Journal of the European Communities                              No C 183/5
                   ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
development of economic activities throughout the              harmonious development of             economic     activities
Community;                                                     throughout the Community;
Whereas the Preliminary Programme of the European              Whereas the Preliminary Programme of the European
Economic Community for a consumer protection and               Economic Community for a consumer protection and
information policy (*) provides inter alia that the            information policy (x) provided inter alia that the
consumer should be protected from unfair credit                consumer should be protected against unfair credit
terms and that a harmonization of the general                  terms and that a harmonization of the general
conditions governing consumer credit should be                 conditions governing consumer credit should be
undertaken as a priority; whereas for the foregoing            undertaken as a priority; whereas the Second
reasons the laws in force in Member States                     Programme of the European Economic Community
concerning consumer credit directly affect the                 for a consumer protection and information policy (2)
functioning of the common market;                              lists the Commission's proposal for a Directive on
                                                               consumer credit as one which is still under discussion
                                                               in the Council; whereas, in relation to action already
                                                               begun by the Commission under the Preliminary
                                                               Programme but not completed, paragraph 30 of the
                                                               Second Programme requires the Commission to
                                                               pursue that action, particularly as regards certain
                                                               unfair commercial practices; whereas these latter are
                                                               to some extent regulated in this present Directive in
                                                               so far as they affect consumer credit;
                                                               Whereas the laws in force in the Member States
                                                               concerning consumer credit cause fragmentation of
                                                               the market in consumer credit, tend by their very
                                                               nature to perpetuate that fragmentation, accordingly
                                                               operate to that extent as obstacles to the establishment
                                                               of a common market in consumer credit, and
                                                               therefore, given the enormous and constantly in-
                                                               creasing volume of credit granted in the European
                                                               Economic Community to consumers, which is a
                                                               reflection of society's dependence upon credit in
                                                                general, directly affect the functioning of the common
                                                                market;
 Whereas in the European Community the demand for               Whereas the establishment of a common market in
 consumer credit in order to meet private needs has             consumer credit would benefit alike consumers,
 increased considerably in recent decades; whereas it           grantors of credit, manufacturers of goods and
 continues to show this overall tendency;                       providers of services;
 Whereas the type of credit taken out has changed               Whereas there has been much change in recent years
 over a period of time; whereas new forms have                  in the types of credit available to and used by
 emerged and continue to develop;                               consumers; whereas new forms of consumer credit
                                                                have emerged and continue to develop;
 Whereas the consumer does not always receive                   Whereas the consumer does not always receive
 sufficient information on the conditions and cost of           enough information on the conditions and cost of
 credit and the nature of his obligations; whereas the          credit and on the nature of his obligations; whereas
 terms of credit agreements are often disadvantageous           he would be much assisted in this if he were told inter
 to the consumer;                                               alia, the annual percentage rate of charge for credit;
                                                                whereas      there    should      be    established,      for
 (•) Oj No C 92, 25. 4. 1975, p. 1.                              C) OJ No C 92, 25, 4. 1975, p. 1.
                                                                 O O J N o C 133, 3.6. 1981, p. 1.
 ---pagebreak---   No C 183/6                         Official Journal of the European Communities                                   1 o. 7. 84
                    ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
                                                                 each type of consumer credit, a uniform method of
                                                                 calculating the annual percentage rate of charge for
                                                                 credit, which uniform method should be used in every
                                                                 Member State;
                                                                Whereas the terms of credit are often disadvantageous
                                                                 to the consumer;
 Whereas better protection of consumers can be                   Whereas better protection of consumers can be
 achieved by adopting certain minimum requirements               achieved by adopting certain requirements which are
 for all forms of credit; whereas, nevertheless, specific        to apply to all forms of credit;
 rules governing overdrafts granted or accepted by
 banks and other finance institutions should be laid             Whereas, however, it is appropriate that certain types
 down;                                                           of consumer credit and certain kinds of transaction be
                                                                 excluded from the scope of this Directive, namely:
                                                                (a) credit intended primarily for the purpose of
                                                                     acquiring or retaining property rights in land or
                                                                     buildings or of renovating or improving the
                                                                     structure of a building,
                                                                (b) hiring agreements under which the title does not
                                                                     ultimately pass to the hirer,
                                                                (c) credit to finance the supply of goods or services
                                                                     and which the consumer is under obligation to
                                                                     repay within three months of the date on which
                                                                     the credit is granted,
                                                               (d) credit granted in the form of an advance on a
                                                                     current account, or accepted in that form, by a
                                                                     credit institution or other financial institution, but
                                                                     certain specific rules relating to overdrafts granted
                                                                     or accepted by these institutions should
                                                                     nevertheless be laid down,
                                                               (e) credit of an amount less than 200 ECU or more
                                                                     than 30 000 ECU, these upper and lower limits
                                                                     being nevertheless adjustable in line with the
                                                                     average annual rate of inflation in the European
                                                                     Community;
Whereas it may be necessary to fix different financial         Whereas it is necessary to adjust periodically, in
limits above or below which the provisions of this             accordance with a Community procedure, the financial
Directive shall not apply in light of their different          limits above or below which this Directive shall not
economic effects in each Member State; whereas such            apply; whereas for the sake of legal certainty these
financial limits have to be determined in accordance           upper and lower limits, and their values in the national
with a Community procedure;                                    currency of each Member State, must be fixed on the
                                                               basis of the rates of exchange prevailing on the day on
                                                               which the limits are fixed; whereas, for the like
                                                               reason, the values of these limits in each national
                                                               currency of the Member States must continue to apply
                                                               until the limits are adjusted;
Whereas the provision of information on the cost of            Whereas the provision of information on the cost of
credit in advertising and at the business premises of          credit in advertising and at the business premises of
the creditor or credit broker can make it easier for           the creditor or credit broker can make it easier for
the consumer to compare different offers; whereas              the consumer to compare different offers; whereas the
 ---pagebreak---  10.7.84                            Official Journal of the European Communities                           N o C 18 3/7
                   ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
Member States should be permitted to completely                consumer should be allowed a cooling-off period of
prohibit the unsolicited canvassing of consumers for           not less than seven days from the date of conclusion
the purpose of offering personal credit;                       of a credit agreement which results from an
                                                               unsolicited visit to him at his home, his place of work
                                                               or elsewhere and is concluded in a place other than
                                                               the place of business of the creditor or negotiator;
                                                               whereas the consumer should be given notice of his
                                                               right to cool off;
Whereas consumer protection is further improved if             Whereas consumer protection is further improved if
credit agreements are made in writing and contain              credit agreements are made in writing and contain at
 certain particulars concerning the essential con-             least certain minimum particulars concerning the
tractual conditions;                                           contractual terms; whereas the consequences of failure
                                                               to respect the provisions requiring disclosure of those
                                                               terms are to be determined by application of the
                                                               national law;
Whereas, in the event of default in payments on the            Whereas provision should be made for credit
part of the consumer, the creditor should not be               agreements to terminate where the creditor
permitted to repossess goods supplied on credit where          repossesses the goods; whereas repossession of the
the consumer remains liable for payment; whereas               goods or early termination of a credit agreement must
provisions should be made for credit agreements to be          not disadvantage any of the parties, unjustifiably;
deemed to be terminated where the creditor                     whereas, where the consumer has paid a certain pro-
repossesses the goods;                                         portion of the price but then defaults in payment, the
                                                               creditor should not be permitted, except by order of a
                                                               court, to repossess goods supplied on credit;
Whereas, in view of the considerable bearing which             Whereas, in view of the considerable bearing which
credit has on the consumer's economic and, in many             credit has on the consumer's economic and, in many
cases personal situation, he should be allowed to              cases, personal situation, he should be allowed to
discharge his obligations before the due date; whereas         discharge his obligations before the due date; whereas
the interest and other charges paid should then be             the interest and other charges payable should then be
refunded in accordance with the provisions adopted             reduced, or, if already paid, should be refunded, in
by the Member State;                                           accordance with the provisions adopted by the
                                                               Member State;
Whereas the assignment of rights arising from credit           Whereas the assignment of the creditor's rights arising
agreements should not be allowed to weaken the                 under a credit agreement should not be allowed to
position of the consumer;                                      weaken the position of the consumer;
Whereas the use of negotiable instruments in credit            Whereas the use of negotiable instruments in credit
 agreements with a consumer should be restricted;              agreements with a consumer should be restricted;
whereas cheques should be used only as a means of              whereas cheques and bank notes should be used only
payment;                                                       as means of payment in this context;
Whereas, in the event of cooperation between a                 Whereas, in the event of cooperation between a
creditor and a supplier, they should be jointly and            grantor of credit ('the creditor') and a supplier of
severally liable to the consumer for the payments              goods or services ('the supplier'), in such circum-
made by him if the goods are not supplied or are not           stances that the supply of the goods or the provision of
in accordance with the terms of the agreement;                 the services is to be financed by the creditor under an
whereas liability should not also be imposed on the            arrangement between him and the supplier, they
creditor in respect of damage caused by a defective            should be jointly and severally liable to the consumer
 ---pagebreak--- No C 183/8                           Official Journal of the European Communities                                 10.7.84
                     ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
item to other property of the consumer or of a third             for reimbursement of the payments made by him, if
party;                                                           the goods or services are not supplied or do not
                                                                 conform with the terms of the agreement; whereas it
                                                                 is appropriate that the creditor be indemnified by the
                                                                 supplier if the creditor reimburses the consumer in
                                                                 those circumstances;
Whereas suitable measures to be chosen by the                   Whereas suitable measures to be chosen by the
Member States should be adopted for supervising                 Member States should be adopted for supervising
creditors;                                                      creditors;
Whereas contractual clauses excluding the application           Whereas contractual clauses excluding the application
of the provisions adopted pursuant to this Directive            of the provisions adopted in implementation of this
must not be permitted;                                           Directive must not be permitted;
Whereas the provisions of this Directive shall not              Whereas the provisions of this Directive must not
prevent Member States from adopting other measures              prevent Member States from adopting other measures
to protect consumers, with due regard for their                 to protect consumers, with due regard for their
obligations under the Treaty establishing the                   obligations under the Treaty establishing the
European Economic Community and in particular the               European Economic Community and, in particular,
rules on the free movement of goods, the freedom to             the rules on free movement of goods, freedom to
provide services, and competition,                              provide services, and competition;
                                                                Whereas the entry into force in the Member States of
                                                                the provisions establishing for each type of consumer
                                                                credit a uniform method of calculating the annual
                                                                percentage rate of charge for credit must coincide
                                                                with the entry into force of the provisions adopted by
                                                                the Member States in implementation of the
                                                                remaining parts of this Directive,
HAS ADOPTED THIS DIRECTIVE:                                     HAS ADOPTED THIS DIRECTIVE:
                         Article 1                                                       Article 1
1.    This Directive shall apply to credit agreements.          1.     This Directive applies to credit agreements.
2.    For the purpose of this Directive:                        2.     For the purpose of this Directive:
(a) 'consumer' means a natural person not acting                (a) 'consumer' means a natural person who, in
    predominantly in a commercial or professional                    transactions covered by this Directive, is acting
    capacity;                                                        for purposes which can be regarded as outside his
                                                                     trade or profession;
(b) 'creditor' means a natural or legal person who              (b) 'creditor' means a natural or legal person who
    grants credit in the course of his commercial                    grants credit in the course of his trade, business or
     activity or business, or a group of such persons;               profession, or a group of such persons;
(c) 'credit agreement' means an agreement whereby a             (c) 'credit agreement' means an agreement whereby a
    creditor grants a consumer credit in the form of                 creditor grants or promises to grant to a
    deferred payment, a loan or a promise to grant a                 Consumer a credit in the form of a deferred
    loan or other financial accommodation and under                  payment,      a    loan     or     other    financial
    which the consumer repays the credit, including                  accommodation, and under which the consumer
    any interest and charges, in more than one                       repays the credit* including any interest and
    instalment;                                                      charges, in more than one instalment;
 ---pagebreak--- 10.7.84                               Official Journal of the European Communities                             No C 183/9
                     ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
(d) 'effective annual rate of interest' means the total          (d) 'annual percentage rate of charge' means the total
     cost of the credit expressed as an annual                        cost of the credit expressed as an annual
     percentage of the amount of the credit granted,                  percentage of the amount of the credit granted.
     including interest and all other charges; the                    The total cost of the credit will include, in
     effective annual rate of interest shall be calculated            particular, interest and any other charges which
     in accordance with the rules laid down by the                    arise under:
     Member States.                                                     (i) the credit agreement itself;
                                                                       (ii) any transaction entered into to comply with
                                                                            the credit agreement;
                                                                      (iii) any other contract which the creditor insists
                                                                            on the consumer or a relative of his making
                                                                            or maintaining as a condition of being
                                                                            granted the credit;
                                                                      (iv) any contract for security relating to the credit
                                                                            agreement; and
                                                                       (v) any statutory obligation connected with the
                                                                            making of the credit agreement.
                                                                      The matters set out at (i) to (iv) inclusive do not
                                                                      include premiums payable in contracts of
                                                                      insurance when the choice of the insurer is left to
                                                                      the consumer.
                                                                      All references in this Directive to the annual
                                                                      percentage rate of charge are references to the
                                                                      annual percentage rate of charge calculated in
                                                                      accordance with the provisions adopted in
                                                                      implementation of the Directive mentioned in the
                                                                      next following subparagraph.
                                                                      Within one year after notification of this Directive
                                                                      the Commission shall adopt a Directive
                                                                      establishing a uniform method of calculating the
                                                                      annual percentage rate of charge.
3.     An agreement for the supply of goods or the               3.     An agreement for the supply of goods or the
provision of services concluded with a consumer                  provision of services concluded with a consumer
(a) which is financed by means of a credit agreement             which is financed by means of a credit agreement
     between a supplier and a consumer, or                       between the supplier of the goods or provider of the
                                                                 services and the consumer shall be deemed to be a
                                                                 credit agreement within the meaning of paragraph 2.
(b) which is financed by means of a credit agreement
     between a creditor and a consumer, in so far as
     the creditor cooperates with the supplier in the
     performance of the agreement for the supply of
     goods or the provision of services,
shall also be deemed to be a credit agreement within
the meaning of paragraph 2.
4.     Member States shall adjust the provisions of this         4.     Member States shall apply the provisions of this
Directive in applying them to credit agreements                  Directive mutatis mutandis to credit agreements
between a broker and a consumer.                                 involving an intermediary.
                          Article 2                                                        Article 2
 1.    This Directive shall not apply to:                         1.     This Directive does not apply to:
 (a) credit agreements or agreements promising to                 (a) credit agreements or agreements promising to
      grant credit intended primarily for the purpose of               grant credit intended primarily for the purpose of
      acquiring property rights in land or in an existing              acquiring or retaining property rights in land or
      or projected building or intended for the purpose                in an existing or projected building or intended
      of renovating or improving a building;                           for the purpose of renovating or improving the
                                                                       structure of a building;
 ---pagebreak---  N o C 183/10                         Official Journal of the European Communities                                10.7.84
                     ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
(b) hiring agreements;                                           (b) hiring agreements under which the title does not
                                                                      ultimately pass to the hirer;
(c) agreements, in particular for the supply of goods            (c) unchanged;
     or the provision of services, under which the
     consumer is granted a period not exceeding three
     months within which to pay the price stipulated in
     the agreement;
(d) subject to the provisions of Article 8, credit in the        (d) subject to the provisions of Article 8, credit in the
     form of advances on a current account granted or                form of advances on a current account granted or
     accepted by a credit institution or financial                   accepted by a credit institution or financial
     institution, other than credit cards;                           institution, other than on credit card accounts;
(e) amounts greater or less than particular sums to be           (e) agreements involving amounts less than 200 or
     fixed by the Commission for a Member State                      more than 30 000 ECU, these limits to be adjusted
     which so requests after consultation with that                  periodically by the Commission in line with the
     Member State.                                                   average annual rate of inflation in the
                                                                     Community.
                                                                     The parities between the national currencies of
                                                                     Member States and these upper and lower limits
                                                                     shall be fixed at the rates of exchange prevailing
                                                                     on the same day as the limits themselves are fixed
                                                                     and shall continue until such time as the
                                                                     Commission shall adjust such limits.
2.     Where the provisions of paragraph 1 (e) above             2.    Member States shall ensure that the provisions
are applied, Member States concerned shall take steps           which they adopt in implementation of this Directive
to ensure that the provisions on consumer credit are             are not circumvented as a result of the way in which
not circumvented as a result of the way in which                 agreements are formulated, in particular by the device
agreements are formulated, in particular by the device           of distributing the amount of credit over several
of distributing the amount of credit over several                agreements.
agreements.
                         Article 3                                                        Article 3
Without prejudice to the general rules on misleading            Without prejudice to the general rules on misleading
and unfair advertising, an advertisement in which a              and unfair advertising, any advertisement in which a
person offers to conclude or arrange credit                     person offers to conclude or arrange credit
agreements, and in which costs relating to the credit            agreements, and in which any rate is expressed or
are indicated, shall show the total cost.                       implied to be the rate of charge or interest, shall also
                                                                indicate the annual percentage rate of charge, by
Where a percentage is given, the effective annual rate          means of an example if no other means is practicable.
of interest must also be indicated.
                         Article 4                                                        Article 4
Member States may prohibit unsolicited visits to a              A credit agreement which results from an unsolicited
consumer at his home, at his place of work or                   visit to a consumer at his home, his place of work or
elsewhere for the purpose of proposing to him the               elsewhere and is concluded in some place other than
conclusion of a credit agreement.                               the place of business of the creditor or negotiator shall
                                                                be subject to cancellation by the consumer by
                                                                notification to the creditor within a cooling-off period
                                                                of not less than seven days from the conclusion of the
                                                                agreement. This right of cancellation shall be made
                                                                known to the consumer by clear written notice given
                                                                to him not later than the time of the conclusion of the
                                                                agreement.
 ---pagebreak--- 10. 7. 84                              Official Journal of the European Communities                            No C 183/11
                       ORIGINAL PROPOSAL                                                 AMENDED PROPOSAL
                                                                  For the purposes of this Article a period of approval
                                                                  during which the consumer has possession of the
                                                                  goods and may return the same free of charge shall be
                                                                  deemed to be a cooling-off period.
                            Article 5                                                        Article 5
Any person offering to conclude or arrange credit                 Any offer to provide credit, which is displayed at
agreements shall clearly display, at those of his                 business premises to which the public has access, shall
business premises to which the public has access, the             include a statement of the annual percentage rate of
annual rate of interest and other costs relating to the           charge, where appropriate by means of an example.
credit which he grants or arranges, and/or a notice to
the effect that the consumer may request an offer
which shall be binding on such a person if he grants
the credit. He shall in both cases give examples of the
effective annual rate of interest in respect of given
sums.
                            Article 6                                                        Article 6
1.     Credit agreements shall be made in writing. All             1.    Credit agreements shall be made in writing.
credit agreements shall be signed by both parties. The            The consumer shall receive a copy of the written
facsimile signature of the creditor shall suffice.                agreement.
The consumer shall receive a copy of the written
agreement.
 2.    The written agreement shall contain the                     2.    The written agreement shall contain at least the
 essential contractual conditions and at least the                 following terms:
 following particulars:
(a) for credit agreements for the supply of goods or              (a) credit agreements for financing the supply of
     the provision of services:                                         particular goods or services:
        (i) a description of the goods          or  services
            covered by the agreement;                                      (i) unchanged;
       (ii) the cash price and the credit price where this
            differs from the cash price;                                  (ii) unchanged;
      (iii) the effective annual rate of interest; where
            the cash price and the credit price are                      (iii) the annual percentage rate of charge;
            different;
      (iv) the amount of the deposit (if any) and the                    (iv) the amount of the deposit (if any), the
            due dates, the number and amount of the                            number and size of instalments and the
            instalments;                                                       dates on which they fall due, or the method
                                                                               of ascertaining any of the same if unknown
                                                                               at the time of agreement;
        (v) the terms covering any rebate for early                        (v) an indication that the borrower will be
             repayment;                                                         entitled, as provided in Article 10, to a
                                                                                reduction or refund if he repays early;
       (vi) who owns the goods and the terms under                       (vi) who owns the goods, and the terms on
            which the consumer becomes the owner of                            which the consumer becomes the owner of
            the goods;                                                          them;
      (vii) details of the security required (if any);                   (vii) an indication of the security required, if
                                                                                 any;
 ---pagebreak--- N o C 183/12                          Official Journal of the European Communities                                  10.7.84
                    ORIGINAL PROPOSAL                                                    AMENDED PROPOSAL
                                                                      (viii) the cooling-off period, if any;
                                                                         (ix) the conditions and terms applicable         to
                                                                                changes in the rate of interest;
                                                                           (x) an indication of the insurance(s) required, if
                                                                                any, and, when the choice of insurer is not
                                                                                left to the consumer, an indication of the
                                                                                cost thereof;
(b) for credit agreements in the form of credit cards:           (b) credit agreements operated by credit cards:
       (i) a means of identifying the credit card;                        (i) the serial number of the credit card, if
                                                                               known;
      (ii) the credit limit (if any);                                   (ii) unchanged;
     (iii) annual rate of interest (if any) and the                    (iii) the annual percentage rate of charge;
           amount of any charges;
     (iv) the terms of repayment;                                     (iv) the terms of repayment or the means of
                                                                              determining the same;
                                                                        (v) the cooling-off period, if any;
                                                                      (vi) the conditions and terms applicable             to
                                                                              changes in the rate of interest.
                                                                      The provisions of paragraph 1 and paragraph 2
                                                                      (a) shall not apply to an agreement for the supply
                                                                      of goods or the provision of services concluded
                                                                      with a consumer, which is financed by means of an
                                                                      existing credit agreement operated by a credit
                                                                      card.
                                                                 (c) credit agreements in the form of running accounts
                                                                      not otherwise covered by this Directive:
                                                                         (i) the limit of credit or         the  method   of
                                                                              determining the same;
                                                                       (ii) the annual percentage rate of charge;
                                                                      (iii) the terms of use and repayment;
                                                                      (iv) the cooling-off period, if any;
                                                                       (v) the conditions and terms applicable            to
                                                                              changes in the rate of interest.
                                                                      The provisions of paragraph 1 and paragraph 2
                                                                      (a) shall not apply to an agreement for the supply
                                                                    • of goods or the provision of services concluded
                                                                      with a consumer, which is financed by means of an
                                                                      existing credit agreement in the form of a running
                                                                      account not otherwise covered in this Directive
                                                                      between the same supplier and the same consumer.
(c) for other credit agreements falling within the               (d) other credit agreements falling within the scope
    scope of this Directive:                                          of this Directive:
      (i) the amount or limit of the credit or — in the                   (i) unchanged;
           case of a promise to grant credit — the
           amount or limit of the credit proposed;
 ---pagebreak---  10.7.84                                 Official Journal of the European Communities                             N o C 183/13
                       ORIGINAL PROPOSAL                                                  AMENDED PROPOSAL
      (ii) the annual rate of interest and any other                       (ii) the annual percentage rate of charge;
            charges;
      (iii) the effective annual rate of interest unless a                (iii) an indication of the security required, if any;
            promise of a loan is concerned, in which case
            that rate shall be specified at the date when
            the loan is taken up;
      (iv) an indication of the security required (if                     (iv) the terms of repayment;
            any);
       (v) the terms of repayment.                                         (v) the cooling-off period, if any;
                                                                          (vi) the conditions and terms applicable            to
                                                                                changes in the rate of interest.
                            Article 7                                                          Article 7
 The laws of each Member State shall lay down the                    Unchanged.
 legal consequences of failure to respect the provisions
 of Article 6.
                            Article 8                                                          Article 8
 Notwithstanding the exclusion provided for in Article               Notwithstanding the exclusion provided for in Article
 2 (1) (d), the consumer shall be informed in writing                2 (1) (d), the consumer shall be informed in writing
 in the case of credit in the form of an advance on a                in the case of credit in the form of an advance on a
 current account within the meaning of Article 2 (1)                 current account within the meaning of Article 2 (1)
 (d):                                                                (d):
 (a) at the time the agreement is concluded:                         (a) at the time or before the agreement is concluded,
      — of the credit limit (if any);                                     —    unchanged;
      — of the annual rate of interest and the charges                    —    unchanged;
           applicable from the time the agreement is
           concluded and the conditions under which it
           may be amended;
      — of the procedure             for   terminating     the            —    unchanged;
           agreement;
 (b) during the period of the contract credit                        (b) during the period of agreement, of any change in
      agreement, of any change in the annual rate of                      the annual rate of interest or in the relevant
      interest or in the relevant charges at the time it                  charges at the time it occurs. Such information
      occurs. Such information may be given in a bank                     may be given in a statement of account at
      statement if such statements are sent at intervals                  intervals of three months or less;
      of one month or less;
 (c) when a tacitly accepted overdraft extends beyond                (c) when a tacitly accepted overdraft extends beyond
      a period of three months of the annual rate of                      a period of three months, of the annual rate of
      interest and any relevant charges, and of any                       interest and of any relevant charges, and of any
      amendments thereto.                                                 amendment thereof.
                           Article 9                                                          Article 9
1.     A credit agreement shall be void from the time               1.     A credit agreement relating to goods shall
the creditor repossesses, either on the basis of a right            terminate if the relevant goods are repossessed, on the
of ownership or of any other right, the goods                       basis eithef of a right of ownership or of any other
supplied under a credit agreement.                                  right.
2.      Member States shall lay down rules to ensure                2.      Member States shall lay down rules to ensure
that repossession of goods does not lead to                         that repossession of goods or early termination of a
unjustified disadvantages to any of the parties                     credit agreement does not lead to Unjustified disad-
involved.                                                           vantages to arty of the parties involved,
 ---pagebreak---  N o C 183/14                      Official Journal of the European Communities                                 10.7. 84
                   ORIGINAL PROPOSAL                                              AMENDED PROPOSAL
                                                              3.    Where the consumer has repaid one-third or
                                                              more of the credit price of the goods, the creditor
                                                              may not recover possession of the goods on the
                                                              ground of his right of ownership, or of any other
                                                              right, except on order of a court.
                                                              4.    Where goods are recovered by the creditor in
                                                              contravention     of   the     rules  laid    down      in
                                                              implementation of paragraphs 2 and 3, the credit
                                                              agreement shall terminate and the consumer shall be
                                                              released from all liability under the agreement and
                                                              shall be entitled to recover from the creditor all the
                                                              sums paid to him under the agreement.
                       Article 10                                                    Article 10
The consumer shall be entitled to discharge his               The consumer shall be entitled to discharge his
obligations under a credit agreement before the time          obligations under a credit agreement before the time
fixed by the agreement; in this case, interest and            fixed by the agreement; in this event the consumer
other charges shall be refunded in accordance with            shall be entitled to an appropriate reduction in the
the provisions adopted by the Member States.                  total amount payable, or to an equivalent refund if the
                                                              whole amount has already been paid, in accordance
                                                              with the rules laid down by the Member States.
                       Article 11                                                    Article 11
Where the creditor assigns to a third person his rights       Unchanged.
against the consumer under a credit agreement, the
consumer shall be entitled to plead against the third
party any defence — including set-off — which is or
would have been available to him against the creditor
before the assignment.
                       Article 12                                                    Article 12
In the operation of credit agreements:                       In the operation of credit agreements:
(a) bills of exchange, other than cheques, and prom-         (a) cheques and bank notes may be used only as
    issory notes may not be used either as security or            means of payment or repayment but not
    as a means of payment;                                        otherwise;
(b) cheques may be used only as a means of payment.           (b) subject to (a), negotiable instruments shall not be
                                                                  used either as security or as means of payment;
                                                             (c) if a consumer becomes liable to a holder in due
                                                                  course of a negotiable instrument, the creditor
                                                                  shall indemnify him in respect of that liability.
                       Article 13                                                    Article 13
1.    Where the consumer proves the existence of              1.    Where it is established that an arrangement
cooperation as referred to in Article 1 (3) (b), and         exists between a supplier of goods or services and a
where the goods are not supplied or the services are         creditor by which the supply is to be financed by a
not provided, and where he is not responsible for            loan or loans to the consumer, and where, in such a
such failure to supply the goods or services, he shall,      case, the goods are not supplied or the services are not
provided he has the right under the laws of the              provided and the consumer is not responsible for such
Member State concerned to recover from the supplier          failure to supply the goods or services, he shall be
 ---pagebreak---  10.7.84                              Official Journal of the European Communities                           N o C 183/15
                     ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
payments made by him and to refuse further                       entitled to recover from the supplier or creditor, or
payment, enjoy the same right in relation to the                 both of them, all payments made by him under the
creditor.                                                        agreement for supply of the goods or provision of the
                                                                 services, or under the agreement for loan, in respect
                                                                 of the goods not supplied or services not provided,
                                                                 and may refuse to make any further payment to either
                                                                 of them in respect thereof.
2.    The consumer shall have the same rights under              2.     The consumer shall have the same rights under
the conditions specified in paragraph 1 where the                the conditions specified in paragraph 1 where the
goods supplied or services provided do not conform               goods supplied or services provided do not conform
to the agreement.                                                to the agreement, in circumstances where such failure
                                                                 to conform would entitle the consumer to rescission of
                                                                 the contract under the applicable national law.
3.     In the cases referred to in paragraphs 1 and 2,           3.     In the cases referred to in paragraphs 1 and 2,
the supplier and creditor shall be jointly and severally         the supplier and creditor shall be jointly and severally
liable to the consumer for any repayment of sums                 liable to the consumer.
paid.
4.     This Article shall not prejudice any other rights         4.     This Article shall not prejudice any other rights
of the creditor against the supplier or rights of the            of the consumer against the supplier or rights of the
creditor against the supplier.                                   creditor against the supplier.
                                                                 Subject to any agreement to the contrary, the creditor
                                                                 shall be entitled to be indemnified by the supplier
                                                                 against any loss arising from the operation of this
                                                                 Article.
                         Article 14                                                       Article 14
1.     Member States shall provide that:                         1.     Member States shall provide that:
(a) persons offering to conclude or arrange credit               (a) unchanged
     agreements shall obtain official authorization; or
(b) persons       concluding     or    arranging    credit       (b) unchanged
     agreements shall be subject to inspection of their
     activities by an official body; or
(c) a body be set up to examine complaints from                  (c) a body be empowered to examine complaints
     individual      consumers      concerning      credit            from individual consumers concerning credit
     agreements entered into by or offered to them as                 agreements entered into by or offered to them, as
     well as to receive complaints from consumer                      well as to receive complaints from consumer
     organizations concerning credit agreements or                    organizations concerning credit agreements or
     credit conditions offered to consumers;                          credit conditions offered to consumers.
(d) if persons referred to in paragraph (a) above
     satisfy the definition in Article 1 of the First            2.     If persons offering to conclude or arrange credit
     Coordinating Directive on Banking Activities ('),           agreements satisfy the definition in Article 1 of the
     they may not receive official authorization to              First Council Directive 77/780/EEC on the coordi-
     exercise their activity before they have received           nation of laws, regulations and administrative
     banking authorization.                                      provisions relating to the taking up and pursuit of the
                                                                 business of credit institutions ('), they may not receive
                                                                 official authorization to exercise their activity before
                                                                 they have received authorization under the provisions
                                                                 of that Directive.
 O OJ No L 322, 17. 12. 1977, p. 30.                              (') OJ No L 322, 17. 12. 1977, p. 30.
 ---pagebreak--- N o C 183/16                        Official Journal of the European Communities                              10.7.84
                    ORIGINAL PROPOSAL                                             AMENDED PROPOSAL
                                                               Where authorization under the provisions of that
                                                               Directive is withdrawn, official authorization to offer
                                                               to conclude or arrange credit agreements shall also be
                                                               withdrawn.
                                                               Nevertheless, by way of derogation from the
                                                               foregoing subparagraph, where such persons expressly
                                                               surrender their authorization to receive deposits, they
                                                               may continue to grant credits, or to act as interme-
                                                               diaries for purposes of the conclusion of credit
                                                               agreements, provided the surrender is notified to the
                                                               authorities empowered to issue the said official
                                                               authorization and those authorities consider that those
                                                               persons should be permitted to continue granting
                                                               credits.
2.    The body referred to in paragraph 1 (c) shall be         3.    Any body empowered under paragraph 1 (c) to
empowered to examine the complaints it receives to             receive complaints shall also be empowered to
advise consumers on the legal protection to which              examine the complaints it receives, to advise
they are entitled and to institute legal proceedings on        consumers on the legal protection to which they are
their behalf where they do not wish to exercise their          entitled and to institute legal proceedings on their
rights but are willing to let the body act for them.           behalf where they do not wish to exercise their rights
                                                               but are willing to let the body act for them.
                        Article 15                                                      Article 15
No contractual agreement shall derogate, to the                 Unchanged,
disadvantage of the consumer, from the provisions
adopted in application of this Directive.
                        Article 16                                                      Article 16
Member States may lay down or retain more                       Unchanged,
stringent provisions to protect consumers consistent
with their obligations under the Treaty.
                         Article 17                                                     Article 17
 1.   The Member States shall bring into force the              1.    The Member States shall bring into force the
measures necessary to comply with this Directive                measures necessary to comply with this Directive and
within 18 months of its notification and shall                  with the Directive referred to in Article 1 (2) (d)
forthwith inform the Commission thereof.                        within 18 months after notification of this Directive,
                                                                and shall forthwith inform the Commission thereof.
 2.    The Member States shall communicate to the               2.    The Member States shall communicate to the
 Commission the texts of the main provisions of                 Commission the texts of the main provisions of
 national law which they adopt in the field covered by          national law which they adopt in the fields covered by
 this Directive.                                                the two said Directives.
                         Article 18                                                     Article 18
 This Directive is addressed to the Member States.              Unchanged.