EU cracks down on loan websites

The European Union is enforcing stricter policies on loan websites after 70 percent of sites investigated were found to be operating outside the law and giving misleading information to borrowers about credit deals.
In Britain, 81 percent of the sites investigated failed to provide required information or were found to present costs in a misleading way. The EU is now investigating 393 of the 562 websites that it initially checked and has warned that it will fine and close repeat offenders, the Independent reports.
"Online credit often turns out to be more expensive than it had originally appeared, because important information is sometimes unclear or missing," John Dalli, the EU consumer commissioner, said, according to the Independent.
The most frequently broken rule was failing to include an annual percentage rate or other essential information, which is mandatory under the EU Consumer Credit Directive. The websites that enforcement officers targeted included credit card companies, car loans and payday loan firms.
"Consumer credit is not always easy to understand, which is why there is European legislation in place to help consumers," Dalli said, according to the Independent.
Dalli has asked financial authorities throughout Europe to contact the operators of the websites to explain why they have been neglecting the rules. The authorities have been asked to report back to the EU by fallbouncy castle canada.
"We welcome moves to encourage lenders to be clearer with consumers about pricing," John Moorhouse, a spokesperson of the online lender Wonga, said, according to the Independent. "This issue certainly isn't confined to short-term credit, however, and we'd like to see more transparency across all forms of credit."
According to the EU, financial institutions in the eurozone had more than 600 billion Euros outstanding in credit or loans to consumers in 2010.

Comments are closed.