70% of websites break EU credit rules
A pan-European investigation carried out in September 2011 revealed that 70 per cent of websites offering credit cards, loans and finance are failing to meet EU standards.
The investigation, which followed a large number of customer complaints, looked at 562 websites across the 27 member states and found that 393 of the sites were failing to adhere to the European Consumer Credit Directive.
Many of the sites, including all of those checked in Spain, Cyprus and Slovakia, were failing to display an annual percentage rate (APR), which covers the rate of interest, the term of the loan and any fees.
Without this information customers are unable to compare the costs of credit offered by different providers.
The situation was only slightly better in the UK, where concern was raised over 38 of the 47 websites checked.
The report said: “We know that the financial services market - including consumer credit - is underperforming for consumers”.
Following the investigation, national enforcement authorities will contact the financial institutions and credit intermediaries whose sites caused concern.
These businesses will be required to take action to correct the errors and could face fines, or even closure if they still fail to meet the required standards, depending on the legislative framework of the EU state in which they operate.
In related news, Santander reported a 4 per cent fall in UK credit card spending last year.
However, the total number of transactions per cardholder has increased by one per cent.
While there has been an increase in credit card spending on mail order, eating out, utility bills and petrol, there has been a fall in the use of credit cards for larger purchases such as clothing and travel.
Santander’s Callum Gibson said: “During times of austerity, you’d expect cut-backs to hit non-essential items like holidays and clothes and our customer data supports this.”
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