Enhanced consumer protection in loans and distance financial services contracts

Strengthening consumer protection in financial services remains a key topic on the EU legislative agenda. Through Directive (EU) 2023/2225 of 18 October 2023 on credit agreements for consumers (“New Consumer Credit Directive”, also known as CCD II), the EU legislator aims at creating a safer and more transparent environment for consumer credit, in particular in view of the digitalisation of consumer credit services. In addition, the rights of consumers who enter into financial services contracts at a distance are enhanced through Directive (EU) 2023/2673 (“Amending Directive”), adopted on 22 November 2023, which modifies the existing legal framework for consumer rights.

New Consumer Credit Directive

This new text replaces the existing credit consumer directive (Directive 2008/48/EC, also known as CCD) and will modernise the applicable legal framework to take account of the digitalisation of consumer credit services, new consumer habits and new market players and products. The scope of protection is extended to credit agreements up to EUR 100,000 and includes credit agreements below EUR 200 – previously excluded – as well as certain new forms of credit (e.g. “buy now pay later” schemes). Stricter advertising rules will apply, including in particular an obligation to include a prominent warning that borrowing money generates costs, and pre-contractual information obligations are enhanced. The framework was also completed with a withdrawal right, an obligatory assessment of the creditworthiness of the consumer, the prohibition of certain practices (e.g. tying), and caps on charges.

The current directive will continue to apply to credit agreements existing on 20 November 2026 until their termination. The New Consumer Credit Directive must be transposed by 20 November 2025 and shall apply from 20 November 2026.

Amended Consumer Rights Directive

The Amending Directive repeals Directive 2002/65/EC on distance marketing of consumer financial services and extends the scope of Directive 2011/83/EU on consumer rights (“Consumer Rights Directive”) to include contracts concluded at a distance with consumers of financial services. Thus, the general provisions of the Consumer Rights Directive will apply to these contracts, in particular the provisions on forced sales and additional payments.

On the one hand, the core provisions of the repealed directive – information obligations of professionals and consumers’ right of withdrawal under distance financial services contracts – are transferred to a new dedicated chapter of the Consumer Rights Directive. On the other hand, new provisions specific to these distance contracts have been added, including the right for consumers of financial services to request human intervention on websites offering only automated online tools, and enhance consumer protection against misleading online interfaces (e.g. curbing of abusive pop-up practices). These (new) provisions will apply to a significant extent “by default”, in the absence of similar provisions in sectoral EU (and related national transposition) acts, such as MiFID II or IDD.

The Amending Directive must be transposed by 19 December 2025 and will apply as from 19 June 2026.