Ensuring that credit acquisition/management companies respect borrowers’ rights

Subject: Ensuring that credit acquisition/management companies respect borrowers’ rights

In Cyprus, the number of loans handled by credit acquisition and management companies has risen significantly.

In view of this:

1. Given that credit acquisition companies are bound by the provisions of European Directive 93/13/EEC on unfair terms in consumer contracts, what measures will the Commission take in response to Cyprus’ violation of EU law in relation to the obligation to respect borrowers’ rights and ban credit acquisition companies from applying unfair terms?

2. What actions will the Commission take to ensure that Cypriot law enforces the requirement for credit acquisition and management companies to apply the provisions of Directive 93/13/EEC concerning borrowers’ rights?

Submitted:8.6.2023

Answer given by Mr Reynders on behalf of the European Commission

(27 July 2023)

Directive 93/13/EEC on unfair contract terms (1), as interpreted by the Court of Justice of the European Union, requires Member States to adopt all the measures necessary to ensure that consumers are not bound by unfair contract term s (2). It is the primary responsibility of the national authorities and courts to ensure compliance with the directive in all business-to-consumer relationships.

In its role as guardian of the Treaties, the Commission monitors the implementation of EU law by Member States and ensures its uniform application throughout the EU. It refers to its replies to written questions E-004376/2020, E-004377/2020, P- 000374/2021 and E-001992/2021 mentioning the ongoing infringement procedure against Cyprus for ineffective enforcement of Directive 93/13/EEC and Directive 2005/29/EC (3). The Commission is currently assessing information concerning the compliance of Cypriot legislation with Directive 93/13/EEC, in the light of legislative amendments notified in November 2022 and of consumer complaints. Further to that assessment, it will decide on the next steps to take (4).

1 ∙ ⸱ Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, OJ L 95, 21.4.1993, p.29.

2 ∙ ⸱ Commission Notice — Guidance on the interpretation and application of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts,

OJ C 323, 27.9.2019, p. 4‐92, COM(2019)5325 final.

3 ∙ ⸱ Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal

market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’), OJ L 149, 11.6.2005, p. 22‐39. 4 ∙ ⸱ Communication from the Commission — EU law: Better results through better application, C/2016/8600, OJ C 18, 19.1.2017.