Introduction on consumer credit protection

From an internal market standpoint, credit services are of great importance: given their intangible nature, they are, in theory, very likely to be provided on a cross-border basis. In practice, however, the development of an EU-wide market for consumer credit was slow and credit agreements have long remained internal in each EU jurisdiction. Indeed, consumer confidence in foreign providers of credit services was lower than in national providers, mainly due to the diversity of consumer credit law in Member States. The diversity of laws also made it difficult for providers to act in foreign markets due to high transaction costs. Therefore, harmonisation of consumer credit laws was deemed necessary to overcome these obstacles and facilitate the conclusion of cross-border credit transactions.