The Law on Consumer Credit will enter into force on 20 November this year, introducing a comprehensive legal framework for the protection of consumers in the financial services market. This legislative change introduces a key innovation in the form of uniform rules applicable to all types of credit, regardless of their purpose or amount. This eliminates the previous fragmentation of regulations, requiring banks and other lenders to adhere to stricter standards of transparency and conduct towards clients.
The new regulations cover a wide range of financial products, including mortgage loans, unsecured loans, quick loans, and instant online loans. The rules apply to both small and large loans, as well as specific forms of borrowing such as instalment payments via credit cards and trade credit. The aim is to ensure that consumers are provided with a clear and complete picture of borrowing terms, regardless of whether the product is a traditional bank loan or a more modern form of credit.
Lenders are required to provide strictly prescribed information, data, forms, and contracts before the loan is drawn down and the contract is signed. In addition to formal documentation, lenders must provide detailed explanations to ensure that consumers understand their obligations. The prescribed information must include data on the type of interest, potential changes in interest rates, and fees, as well as the consumer’s right to withdraw from the contract.
The law also regulates the right to early repayment and informs borrowers of the consequences of late repayment. A specific provision protects consumers from arbitrary decisions by banks, prohibiting lenders from unilaterally increasing credit card limits or credit limits. This measure prevents unexpected borrowing by consumers and ensures greater control over their financial obligations.
The introduction of technology into the credit approval process guarantees the right to human assessment if a decision is made by artificial intelligence. This ensures that automated systems are not the sole factor in assessing creditworthiness, but that there is a possibility for human intervention and review. This provision further protects the rights of individuals in the digital age.
The extension of consumer protection reaches into the telecommunications sector, where operators must take into account the creditworthiness of customers when approving mobile phone models and tariffs. This measure prevents individuals who cannot afford to cover the costs from incurring debt, thereby reducing the risk of debt accumulation in this sector. The law creates a layered protection for consumers across different industrial sectors.
