Three quarters of the websites surveyed as part of Sweep – a joint EU investigation and enforcement action the results of which were released on 10 January – do not comply with applicable EU legislation in terms of consumer credits. Among those, a large proportion is banks. “It is an unacceptable result” given that “millions of households are over-indebted. Those people cannot afford to make a bad deal,” says Monique Goyens, the managing director of the European Consumers’ Organisation BEUC. In spite of these worrying results, the European Commission has refused to name the financial institutions and the credit intermediaries that are in infringement. The Commission did, however, ask member states to make contact with the operators of the enterprises to request that they to provide explanations or amend their websites.

Sweeps are joint actions that monitor whether the EU consumer protection law is applied in a specific sector. Based on the results of the latest scoreboard of consumer markets, the Commission committed to surveying the consumer credits and fuel markets. In 2010 alone, 711 complaints about malfunctioning on the market of financial services were filed with European Consumer Centres (ECCs).

MAIN PROBLEMS

The ‘Consumer credit sweep’ took place in September 2011 in the 27 member states as well as in Norway and in Iceland. In total, 562 websites were checked by national authorities in charge of applying laws, under the coordination of the Commission. Among those, 367 were managed by financial institutions and 195 by credit intermediaries. Similarly, only one website was verified by the Greek authorities and 93 by the Belgian authorities.

Aside from this lack of coherence, it is mostly the result which is a cause for concerns: only 30% of websites passed the test on compliance with the applicable EU legislation; while 70% of these websites (393) have been marked for further investigation. The main problems noted were the following: missing information in consumer credit advertising on 46% of websites checked (258); omission of key information on the offer in 43% of websites (244); and misleading presentation of the costs on 20% of websites (116). These failings concern, in order of importance: contracts to obtain a personal loan, vehicle financing, a credit card and renewable credit.

NEXT STEPS

Based on these results, the national authorities will make contact with the company operators to ask them to provide explanations, or to take measures to redress these problems. If the operators fail to comply, legal action can be brought in accordance with the applicable national legislation and can end – in the worst of cases – in fines or even websites being shut down. The Commission will write a report based on the progress made by autumn 2012. However, no EU sanction has been planned, and Portugal – which has 14 non-complying websites out of the 40 surveyed – has already made it clear that it does not intend to be harsh in its reactions. Faced with the waves of criticism denouncing the Commission’s inaction, Portugal recalled that consumers continue to have means of legal redress available to them in the case of a violation of law.

Background

Relevant EU legislation includes Directive 2008/48/EC on consumer credit, Directive 2002/65/EC on the distance marketing of consumer financial services; Directive 2000/31/EC on electronic commerce; and Directive 1993/13/EC on unfair clauses in consumer contracts.