New technologies allow online commerce at all levels of goods and services consumption. What about credit? I need a cash reserve, do I have to go to the lender’s office or can I apply for my credit remotely? Let’s take a look at this very trendy contractual operation.
Remote Credit Contract = Traditional Credit Contract
The law shows some flexibility and assimilates the remote contract for a financial service (in this case the granting of credit) to a traditional credit contract. The answer is yes, you can easily choose to enter into a credit contract by phone, internet, or SMS. However, in such a case, the lender must strictly adhere to their duties of investigation, information, and advice to consumers.
Consumer Information and Advice for Concluding a Credit Contract
First, the lender must inform you in a timely manner, that is, before the conclusion of the credit contract, about four fundamental elements: the identity of the service provider, the characteristics of the proposed credit, the content of the remote contract, and the recourse possibilities in case of a dispute.
This communication must be done by any means suitable for the remote communication technique used (for example, an email). However, if for technical reasons it is impossible to communicate this information before the conclusion of the contract, the law allows its transmission to the consumer immediately after the conclusion of the credit contract.
There is also a simplified information regime when you conclude a credit contract using a voice communication system (for example, the phone). This regime will apply subject to your formal agreement.
Furthermore, the lender must examine your solvency and assess the opportunity to grant you credit. They must also provide you, in writing or on any durable medium, with the “Standard European Consumer Credit Information” form or SECCI.
This information document is intended to help you more easily compare different credit offers and thus encourage competition but also to make an informed decision.
You can also request to receive the draft of your credit contract prior to signing it, which will take place electronically if applicable.
Right of Withdrawal
You have at least 14 calendar days to withdraw from the remote contract for a financial service. This right can be exercised without penalties and without any reason.
For exercising this right, the period starts:
- either from the day the remote contract is concluded;
- or from the day the consumer receives the contractual terms and the information mentioned above, if this date is later than the conclusion of the contract.
The period is deemed to be respected if the notification, provided it has been made in writing or on a durable medium available to you and accessible, was sent before the expiration of the 14-day period.
During the withdrawal period, the execution of the contract can only start after your express agreement.
Burden of Proof
It is up to the lender to provide proof that they have fulfilled their obligations regarding consumer information, respect for deadlines, consumer consent to the conclusion of the contract, and, if applicable, its execution during the withdrawal period.