Buy now, pay later: According to consumer advocates, there is often no credit check for such financing offers. Photo: Franziska Gabbert/dpa-tmn
–
(Photo: dpa)
–
–
–
–
“Every month, households have to raise large sums relative to their income to meet the burden of debt.” Mohn demands that the federal government must work to improve consumer protection when revising the EU consumer credit directive.
Credit checks are often missing
Consumer advocates see risks in particular with financing that has not previously been covered by the directive, for example “buy now pay later” offers (buy now, pay later). According to a study by Finance Watch, which surveyed experts from consumer protection organizations in Europe, 43 percent of the offers examined had no credit check and the pre-contractual information was mostly insufficient. This would make it difficult for consumers to estimate what they were getting themselves into when financing.
In general, Finance Watch found deficiencies in credit checks by banks and other lenders. In some cases there was no audit or, from the organization’s point of view, it was insufficient because no data on the household budget was collected. This poses the risk that loans would be granted that consumers could not handle.
Top jobs of the day
Find the best jobs now and
be notified by email.
–
–
–
New policy should apply to all loans
“It is important to ensure that high requirements apply to creditworthiness checks in the future – for all loans, regardless of whether they are arranged in retail or e-commerce, by banks or fintechs,” says Mohn. The EU Commission has presented a successful proposal to revise the directive. “However, there is a risk that the proposal will be watered down by the EU Council, not least because of the attitude of the federal government,” criticizes the financial market team leader at VZBV.
Finance Watch also evaluated test purchases. Among other things, short-term loans under 200 euros, car loans and leasing, personal loans, crowdfunding and “buy now, pay later” were examined.
–
