The Mortgage Credit Directive lays down specific rules designed to restrict some cross-selling practices by way of comparison.


The 2008 Consumer Credit Directive does not comprehensively deal with this practice while cross-selling, whereby a consumer credit product is sold together with payment protection insurance or another financial product, has been identified as one of the major causes of consumer detriment in the European consumer credit markets. The directive just requires that, where in actuality the customer is obliged to shop for insurance coverage so that you can get credit, the expense of such an insurance policy should really be within the total price of credit (this is certainly, APRC) made to help customers compare various provides. Footnote 60 but, the buyer Credit Directive doesn’t impose any restrictions on making the supply of credit depending on re payment security insurance coverage or any other monetary item, cash america loans promo code also referred to as tying. Nor does it include rules made to make sure the suitability that is basic of services and products for specific customers. Even though the credit rating Directive will not preclude Member States from launching such guidelines, Footnote 61 it obviously doesn’t oblige them to do this.

Notably, the directive differentiates between item bundling and product tying.

The latter is comprehended as “the providing or even the selling of the credit contract in a package along with other distinct lending options or solutions where in actuality the credit contract isn’t distributed around the buyer individually.” Footnote 62 Whereas bundling methods are permitted, tying techniques are usually forbidden. Footnote 63 the concept behind this rule is “to avoid techniques such as for instance tying of specific items which may cause customers to come into credit agreements that aren’t within their interest that is best, without nevertheless limiting item bundling which may be good for customers.” Footnote 64

In addition, the Mortgage Credit Directive acknowledges that remuneration policies may incentivize creditors and credit intermediaries to summarize a provided quantity or sort of credit agreements or offer particular services that are ancillary consumers without considering their passions and requirements. Continue reading