Blurred Lines: Between Formal and Substantive Transparency in Consumer Credit Contracts

Abstract

Directive 2008/48/EC aims to guarantee a high level of consumer protection and comparability of consumer credit offers, protecting consumers against over-indebtedness. In light of the ongoing review of this directive, it is important to consider whether the principle of transparency could not play a bigger role in ensuring that consumers are provided with understandable consumer credit information. The authors argue, therefore, that the assessment of the credit information’s transparency should go beyond a mere compliance check with formal aspects of transparency, i.e. whether consumers had access to the information and whether it was legible. At least an equal amount of consideration should be paid to aspects of the substantive transparency, i.e. whether consumers ultimately understood the information. Moreover, the European Commission should strengthen the consumer credit transparency toolbox by explaining the meaning and significance of various transparency requirements, and re-check the effectiveness of the standardised credit information.