The legislator has decided to significantly modify the law on consumer credit to protect consumers and prevent them from falling into over-indebtedness. Here is an overview of the major changes that have taken place since April 1, 2015.
1. The burden of proof is on the lender
It is now up to the lender to demonstrate that they have asked the necessary questions to assess the borrower’s solvency and that they have verified that the consumer was indeed able to meet their “future” commitments.
The lender is also required to re-examine the borrower’s solvency each year based on a consultation of the Central Credit Register. This re-examination also applies to guarantors who undertake to repay the loan if the consumer defaults.
The burden of proof that the consumer had a free choice in relation to the conclusion of any ancillary service contract (for example: a remaining balance insurance) concluded at the same time as the credit contract also falls on the lender, or the credit intermediary.
2. Ban on soliciting
Lenders are prohibited from soliciting door-to-door or sending unsolicited credit offers to consumers. The only exception provided by law is if the lender or credit intermediary visits the consumer’s home at the consumer’s express and prior request.
In addition, the lender may not establish sales points to conclude credit contracts in public places such as train stations or metro stations.
3. A standard credit application form
Whenever your credit amount exceeds 500 euros, the lender or credit intermediary is required to submit a credit application form or, if applicable, an information request form.
From now on, this form is standardized, meaning that the questions included are the same for everyone and must relate specifically to the purpose of the credit, income, dependents, and current financial commitments.
4. Central Credit Register’s globalized response
When a credit intermediary receives a credit application for which they must perform intermediation acts, they may request the lender or credit insurer to consult the Central Credit Register. The lender’s response is said to be globalized, meaning that the information provided to the credit intermediary can only concern the number of credit contracts and the sum of the recorded credit amounts.
The credit intermediary cannot in any case ask the borrower or, if applicable, the person providing security, to exercise their right of access to the Central Credit Register in order to communicate the response obtained.
5. Approval and registration procedures for lenders and credit intermediaries
The approval and registration procedures for lenders and credit intermediaries are changing. It is no longer the FPS Economy but the FSMA that becomes competent in this area. However, the lender is still obliged to submit their contract model to the FPS Economy for approval.
Strict conditions are imposed on credit intermediaries, such as professional liability insurance, mandatory membership with a mediation service, and knowledge and training requirements.
6. Mystery shopping
The FPS Economy may appoint members of its staff or third parties mandated by it to visit credit companies, posing as clients or potential clients, without having to disclose their status as FPS Economy agents or third parties mandated by it and without having to specify that the information obtained during this visit may be used by the FPS Economy for the purposes of exercising its control. Prudence is therefore advised!
