Credit intermediaries – duties and responsibilities

On the occasion of the automobile festival, the Ministry of Consumer Protection provides information on the obligations of credit intermediaries. In fact, many consumers are in the habit of financing their car with a loan they take out through the dealership where they buy the new car. It is all the more important to know what to look out for.

Press release from the Ministry of Consumer Protection

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Original version of the message

On the occasion of the automobile festival, the Ministry of Consumer Protection provides information on the obligations of credit intermediaries. Indeed, many consumers are in the habit of financing their car with a loan that they take out through the dealer from whom they buy the new car. All the more important to know what to pay attention to.

The traditional car festival attracts many consumers eager to buy every year. Many of them use consumer credit to finance their new car. Many car dealerships fulfill the necessary conditions to be able to act as a credit intermediary and support their customers when buying a car. The Ministry of Consumer Protection (MPC) takes the opportunity to inform about the obligations of credit intermediaries.

A credit intermediary, by definition, is a professional who, against remuneration,

• presents or offers credit agreements to consumers,
• assists consumers by carrying out preparatory work for credit agreements, or
• concludes credit agreements with consumers on behalf of the lender.

The credit agreements concerned may take the form of traditional credits, in the form of a refundable overdraft facility or in the form of an overdraft. (Art. L. 224-2 of the Consumer Code)

It is the Ministry of Consumer Protection (MPC) which is responsible for keeping the list of Luxembourg credit intermediaries, accessible to any interested person via Guichet.lu.

As part of its regular market surveys and on the occasion of the automobile festival, the MPC is checking whether the bodies currently on this list comply with the rules of the Consumer Code, namely:

• The data on the MPC list must be complete and correct.
  Indeed, the professional must communicate his own contact details and indicate the identity, physical address and contact details of the intermediaries he may use and the lenders with whom he works.
• The trader is prohibited from advertising specifically focused on the ease or speed with which credit can be obtained.
• The professional must ensure not only that the consumer receives all the information prescribed by law before contracting a loan, but also that the consumer has the time necessary to become acquainted with it and make an informed decision.
• He must indicate, in the advertisements and documents intended for the consumer, the extent of his powers, and in particular whether he works exclusively with one or more lenders, or whether he works as an independent broker. These elements must be indicated in a clear, concise and visible manner.
• On these advertisements, it must mention:
  • The borrowing rate and the fixed/variable nature as well as the costs included in the total cost of the credit,
    
  • The total amount of the credit,
  • The annual percentage rate of charge (APR),
  • The duration of the contract,
  • If it is a contract granted in the form of a term of payment, the cash price and the total amount of any deposit,
  • The total amount due,
  • The amount of the installment payments.
• Finally, the credit intermediary must communicate to the consumer any charges due for his services. These charges are agreed between the consumer and the credit intermediary and put on paper or another durable medium.

Consumers or professionals can contact the MPC in case of questions via the email address [email protected] or by telephone 247 73 700.

In the event of a dispute, consumers can seek support from the ULC or the consumer mediator.

Communicated by the Ministry of Consumer Protection

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