Consumer protection: the EU wants stricter rules for online loans

The EU wants to better protect consumers from internet debt traps. For example, the lending guidelines should also apply online in the future.

In the future, consumers in the EU will be better protected when taking out debt and buying credit on the internet. In the early hours of the morning, negotiators from the European Parliament and the EU states agreed on the new so-called consumer credit directive.

The new directive stipulates that in future, information on loans will have to be particularly clear and understandable on the website. At the same time, consumers’ creditworthiness should be better monitored. The goal is to protect people from excessive debt and financial hardship.

Existing rules need to be expanded

The existing protection rules should in future also apply to loans of less than 200 euros. Crowdlending, where an online platform brokers money from individuals to other people or businesses, also needs to be made more transparent. And online purchases where consumers pay later are also covered by the new rules.

Malte Gallee MEP (Greens), who took part in the negotiations, welcomed the deal. The new directive improves consumer protection in the credit sector and makes an important contribution to preventing the growing over-indebtedness. “What looks like a loan should be treated like a loan,” said Gallee. The agreement has yet to be formally confirmed by parliament and the federal states, but this is considered a formality.