New laws required to fit in with technological advances and new ways of selling consumer credit products.
The European Commission has proposed revisions of two sets of EU rules to enhance consumer rights in a world reshaped by digitalisation and the COVID-19 pandemic. The proposal updates two Directives: the General Product Safety Directive and the Consumer Credit Directive.
Both proposals are part of the New Consumer Agenda, which was launched in 2020 with the aim of updating the overall strategic framework of the EU consumer policy.
The General Product Safety Directive has been in force since 2001 and provides for regulation to ensure that only safe products are sold on the EU single market. However, the Commission says that too many unsafe products still circulate on the EU market, creating an uneven playing field for businesses and a significant cost for society and consumers. In addition, the rules need to be updated to address challenges linked to new technologies and online sales.
The Commission says that online sales have increased steadily in the last 20 years and in 2020, 71% of consumers shopped online, often buying new technology products. The updated General Product Safety Regulation aims to address risks related to these new technology products, such as cybersecurity risks, and to online shopping by introducing product safety rules for online marketplaces. It will ensure that all products reaching EU consumers, through online marketplaces or from the neighbourhood shop, are safe, whether coming from within the EU or from outside. It will also regulate marketplaces so that consumers do not end up with dangerous products.
The Consumer Credit Directive established a harmonised EU framework for consumer credit and provided a framework for fair access to credit for European consumers. However, since its entering into force in 2008 the digitalisation has profoundly changed the decision-making process and the habits of consumers in general. The revision aims to address these developments.
The updated Consumer Credit Directive provides that information related to credits must be presented in a clear way, adapted to the digital devices so that consumers understand what they are signing up for. Furthermore, the Directive aims to improve rules with which creditworthiness is assessed. The regulation will ask also member states to promote financial education and to ensure debt advice is made available to consumers.
The Commission's proposals will now be discussed by Council and Parliament.