The legislator has decided to significantly modify the law on consumer credit in order to protect consumers and prevent them from falling into over-indebtedness. We provide an overview of the major changes that have occurred since April 1, 2015.
1. The burden of proof lies with 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 have verified that the consumer was indeed able to meet their “future” commitments.
The lender is also required to reassess the borrower’s solvency each year based on a consultation of the Central Credit Register. This reassessment also applies to guarantors who commit to repaying the credit if the consumer defaults.
The burden of proof that the consumer had free choice regarding the conclusion of any ancillary service contract (for example: a remaining balance insurance) concluded at the same time as the credit contract also lies with the lender, or the credit intermediary.
2. Prohibition of solicitation
The lender is prohibited from door-to-door solicitation or sending unsolicited credit offers to the consumer. The only exception provided by law is the scenario where the lender, or the credit intermediary, visits the consumer’s home at the consumer’s express and prior request.
Furthermore, the lender cannot establish sales points to conclude credit contracts in public places such as train stations or metro stations.
3. A standard credit application form
As soon as your credit amount exceeds 500 euros, the lender or credit intermediary is required to provide you with 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 notably to the purpose of the credit, income, dependents, and current financial commitments.
4. The globalized response of the Central Credit Register
When a credit intermediary receives a credit application for which they must perform intermediation acts, they can ask the lender or credit insurer to consult the Central Credit Register. The lender’s response is said to be globalized, meaning that the information to the credit intermediary can only concern the number of credit contracts and the sum of the recorded credit amounts.
The credit intermediary cannot, under any circumstances, 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 remains obliged to submit their contract model to the FPS Economy prior to approval.
Strict conditions are imposed on credit intermediaries, such as professional liability insurance, mandatory affiliation with a mediation service, and knowledge and training requirements.
6. Mystery shopping
The FPS Economy can mandate its personnel or third parties appointed by it to visit credit companies, presenting themselves as clients or potential clients, without having to disclose their status as FPS Economy agents or third parties appointed 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. Caution is therefore advised!