Until now, consumers could easily take out microloans for online purchases in instalments via providers such as Klarna and PayPal without credit checks. This easy access naturally involves dangers for consumers. According to consumer activists, it is often not even clear to consumers that what buy now pay later offers are loans. In addition, there is a risk that consumers will carelessly conclude too many buy-now-pay-later loans and lose track. There is also a danger that they will end up buying things they cannot actually afford. In some cases, these microloans are already being used for everyday purchases.
The EU now intends to put a stop to this with a new consumer credit directive aimed at protecting consumers from such debt traps in the future. According to this directive, credit checks will also be required in the future for buy-now-pay-later offers. But what kind of directive would it be if it did not have wide-ranging exceptions? Thus, for example, no credit checks are necessary with the instalment purchase of "Internetable devices". Interest-free loans and loans without late payments are also not to be covered by the new directive.
Since this is a directive that Member States must implement into national law, it will be interesting to see which exceptions will emerge.
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