Role of Credit Intermediaries Clarified in Context of Autofestival

On the occasion of the annual "Autofestival" automobile festival, which is running from 24 January to 5 February 2022 inclusive, Luxembourg's Ministry of Consumer Protection has provided information on the obligations and responsibilites of credit intermediaries.

The ministry noted that the traditional automobile festival attracts many consumers every year. Many of them use consumer credit to finance their new car. Moreover, many car dealerships fulfil the necessary conditions to be able to act as a credit intermediary and support their customers when buying a car.

The Ministry of Consumer Protection recalled that a credit intermediary, by definition, is a professional who, against remuneration, presents or offers credit agreements to consumers, assists consumers by carrying out preparatory work for credit agreements or concludes credit agreements with consumers on behalf of the lender.

The credit agreements concerned may take the form of traditional credits, in the form of a refundable overdraft facility or in the form of an overdraft.

It is the Ministry of Consumer Protection which is responsible for keeping the list of Luxembourg credit intermediaries, freely accessible via Guichet.lu.

As part of its regular market surveys and on the occasion of the automobile festival, the ministry is checking whether the bodies currently on this list comply with the rules of the Luxembourg Consumer Code, namely that the data on the list is complete and correct, the trader is prohibited from advertising specifically focused on the ease or speed with which credit can be obtained and the professional must ensure not only that the consumer receives all the information prescribed by law before contracting a loan, but also that the consumer has the time necessary to become acquainted with it and make an informed decision.

Moreover, the trader must indicate, in the advertisements and documents intended for the consumer, the extent of its powers, and in particular whether it works exclusively with one or more lenders or as an independent broker. 

 The following must be mentioned in such advertisements: the debit rate and the fixed / variable nature as well as the costs included in the total cost of the credit; the total amount of the credit; the annual percentage rate of charge; the duration of the contract; the cash price and the total amount of any deposit (if it is a contract granted in the form of a term of payment); the total amount due; the amount of the installment payments.

Finally, the credit intermediary must communicate to the consumer any charges due for its services. These charges are agreed between the consumer and the credit intermediary and put on paper or other durable medium.

Consumers or professionals can contact the Ministry of Consumer Protection in case of questions via email: info@mpc.etat.lu or via tel.: 247-73700.

In the event of a dispute, consumers can seek support from the Luxembourg consumers' union (Union luxembourgeoise des consommateurs - ULC) or the consumer mediator.