EU credit rules flouted by misleading consumer websites


70% of websites offering loans, finance and credit cards across 29 EU countries are breaking the rules, a general sweep has found.

Of the 562 websites checked, 393 failed, including all sites audited in Slovakia, Spain and Cyprus. Concerns were raised over 38 of 47 UK websites.

Consumer mislead by website offering loans, finance and credit cardsThe issue most frequently raised was the absence of an annual percentage rate, or APR.

APR is the standard by which consumers can compare the costs of credit, including the rate of interest, the term of the loan and any fees. Every lender must declare its APR before an agreement other than an overdraft is signed.

The website sweep was conducted to see if providers were obeying Consumer Credit Directive rules and in the light of consumer complaints about some credit offers.

According to the law, information such as APR should be consistently applied to avoid misleading consumers across the EU, allowing them to shop around with confidence before choosing credit cards, personal loans or vehicle finance.

Member states were free to decide how many websites to investigate and how targeted the checking process should be. Intermediaries and financial institutions were examined, with more intermediary sites responsible for misleading consumers.

65% of the websites found wanting were lacking standard information such as the APR. 62% failed to provide credit cost information, such as whether the rate of interest was variable over time or fixed. Misleading accounts of these costs were given by around 29%.

EU consumer commissioner John Dalli observed that, due to the lack of key information, people looking for credit might discover that it turns out to be more expensive than expected.

"Consumer credit is not always easy to understand, which is why there is European legislation in place to help consumers make informed decisions," said Mr Dalli. "It is therefore very important that businesses provide consumers with the correct and necessary information."

Previous EU sweeps have examined whether credit rules have been flouted by airlines and mobile phone download websites, therein misleading consumers.

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