(Article drafted by Mara Vasileiou, Associate and Anna Chlampoutaki, Senior Associate for Lexology on April 3, 2026)
Overview
The Directive (EU) 2023/2225, which has replaced Directive 2008/48/EC on consumer credit, innovates with highly consumer protection provisions that promote responsible lending in the financial world as aligned with the new digital era. The Directive at hand, which is yet to be transposed into Greek law, with a penalty pending against our country from European Commission for the late implementation, marks a significant transformation in the European Union’s legal framework governing consumer credit agreements. While the previous directive was designed primarily for traditional credit products offered by banks and financial institutions, the new one responds to the rapid digitalization of financial services, the emergence of fintech actors, and the proliferation of innovative credit models such as Buy Now Pay Later (BNPL). As such, it represents a comprehensive modernization of consumer credit regulation, with a strong emphasis on consumer protection, transparency, and responsible lending.
Expanded Scope: Closing the Regulatory Gaps of the former regime
Directive (EU) 2023/2225 has markedly expanded its scope. Under the earlier framework, certain credit agreements—particularly low-value loans and short-term, interest-free arrangements—fell outside full regulation or were only partly covered. Therefore, this created regulatory gaps that were increasingly exploited by new market actors. The new directive, on the other hand, addresses these shortcomings by extending its application to a much broader range of credit products, including low-value loans and BNPL schemes, thereby ensuring that consumers benefit from regulatory protection regardless of the form or size of the credit they obtain. This expansion effectively closes loopholes and ensures a more level playing field across the internal market.
Lending through digital and online credit environments
Closely linked to this broader scope is the directive’s explicit recognition of digital and online credit environments. Unlike its predecessor, Directive (EU) 2023/2225 incorporates detailed provisions on distance and digital contracting, acknowledging that consumer credit is now frequently offered and concluded via online platforms and mobile applications. In this context, the directive also introduces safeguards related to automated decision-making, including the use of algorithms and artificial intelligence in creditworthiness assessments. Creditors are required to ensure transparency in such processes and to avoid discriminatory or opaque practices, thereby aligning consumer credit law with broader EU digital and data protection principles (see GDPR & AI Act).
Pre-Contractual Information and Transparency
Another cornerstone of the new directive is the strengthening of pre-contractual information requirements. While Directive 2008/48/EC already mandated the provision of standardized information, the new framework enhances both the content and the clarity of such disclosures. Creditors must provide detailed, comprehensible, and standardized information on key elements such as the total cost of credit, the annual percentage rate of charge (APR), the duration of the agreement, and repayment conditions, with the newly hereby provided option for early repayment included. The objective is not only formal compliance but also the effective understanding by consumers, enabling them to make informed comparisons between different credit offers.
You can read the article on Lexology here: Directive (EU) 2023/2225 on Consumer Credit: A Comprehensive Overhaul for the Digital Era – Lexology