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01 February 2024

Consumer Credit Directive II: consumer credit legislation for the digital age

A 2020 review of the Consumer Credit Directive (2008/48/EC) ("CCD I") by the European Commission (EC) found that CCD I has been only partially effective in ensuring a high level of consumer protection.

This stem partly from the CCD I itself. The wording of certain provisions is imprecise, so Member States adopted diverging provisions resulting in a highly fragmented regulatory framework across the EU and a limited field of application. There are also several external factors that have contributed to CCD I not (or no longer) meeting its objective of ensuring high standards of consumer protection, such as market developments linked to digitalisation that were not foreseen when CCD I was adopted. In fact, rapid technological developments have profoundly changed the consumer credit market. Consumer behaviour and preferences have evolved with the emergence of new consumer credit products and new market players.

On 30 June 2021, the EC adopted a legislative proposal for a Directive on consumer credits (COM/2021/347 final) aimed at revising and replacing CCD I. The proposal was formally adopted by the European Parliament and the Council on 12 September 2023 and 9 October 2023, respectively ("CCD II").

Key innovations of CCD II

The scope of CCD II is extended to also cover forms of consumer credit that currently fall outside the scope of CCD I. Most notably, this will include products offered through online channels. CCD II will also apply to credit agreements involving a total amount of credit of less than EUR 200, credit agreements where the credit is granted free of interest and without any other charges, and credit agreements in which the credit has to be repaid within three months and only insignificant charges are payable(capturing, in particular buy-now pay-later (BNPL) products).

CCD II was also aimed at adapting existing information requirements to ensure they cater for digital use, in particular taking into account the technical constraints of digital devices. As part of this effort, the Standard European Consumer Credit Information form that must be provided to consumers has been shortened to one page outlining the key features of the credit in question. It should enable consumers to see all the essential information at a glance, even on a mobile phone or other digital device.

Where consumers are presented with a personalised offer that is based on automated processing of personal data, under CCD II the consumer will have to be informed of this fact in a clear and comprehensible manner.

Digital innovation has also been considered when it comes to creditworthiness assessments. Where such assessments involve automated processing of personal data, including profiling, consumers will have the right (and shall be informed of such right) to request and obtain human intervention from the creditor. This includes the right to request and obtain a clear and comprehensible explanation of the creditworthiness assessment, to express their point of view to the creditor, and to request a review of the creditworthiness assessment and the decision on the granting of the credit by the creditor. CCD II expressly stipulates that data retrieved from social networks may not be considered in the creditworthiness assessment.


Member States must implement CCD II into national law by 20 November 2025. The implementing provisions will apply 12 months from the transposition deadline, i.e. from 20 November 2026. While these dates might still seem a ways off, given the considerable need to adapt relevant processes, creditors are well advised to begin preparing for CCD II as soon as possible.

author: Michael Schmiedinger


Attorney at Law

austria vienna