The Bundestag passed legislation on Friday implementing the EU Consumer Credit Directive, introducing stricter regulations for buy-now-pay-later services and overdraft facilities to better protect consumers from over-indebtedness. The reforms will affect millions of people across Germany.
"For consumer protection, today is an important day," declared Federal Consumer Protection Minister Stefanie Hubig (SPD). The reform impacts "many millions of people" and represents a significant step forward in safeguarding German consumers from financial difficulties.
The new regulations specifically target buy-now-pay-later payment models, which have become increasingly popular in online shopping. According to the Federation of German Consumer Organisations (vzbv), these services "pose a particular risk of over-indebtedness for consumers." While a small loan may appear harmless, it becomes problematic when people lose track of multiple outstanding obligations.
"The Bundestag has recognized this and now mandates a thorough examination of existing obligations before contract conclusion," praised vzbv chief Ramona Pop. Under the new law, consumers will only receive credits they can reasonably be expected to repay.
The legislation extends these protections to overdraft facilities as well. Banks are now required to carefully verify whether consumers can repay overdraft credits within a reasonable timeframe. As the vzbv emphasized, "there is also a significant risk of over-indebtedness in overdraft credits."
In a separate but related resolution, the Bundestag called on the federal government to develop statutory regulations for a right to be forgotten for people who have previously had cancer. Currently, these individuals "are still required to disclose their former illness when concluding insurance contracts or credit agreements in Germany," according to the resolution.
"This frequently leads in practice to financial disadvantages, risk surcharges, or contract rejections, even when there is no increased risk from a medical perspective," the text states. The resolution was adopted with votes from the coalition factions, Greens, and Left Party. The AfD abstained from voting.
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