A consumer's creditworthiness is a key concern for every provider of consumer loans. An incorrect or insufficient assessment can have serious consequences, including the invalidity of the loan agreement. The amendment to the Consumer Credit Act (CCA) also introduces changes in this area. Not all of them are purely transpositional; some involve clarifications of terminology, and attention should be paid to the proposed shift in addressing flaws in the creditworthiness assessments. The draft law clearly emphasises substance over a purely formal approach.

New rules include:

• A definition of the term creditworthiness.

• Sensitive personal data and information obtained from social networks must not be used in the assessment of creditworthiness.

• In the case of jointly liable borrowers, creditworthiness must be assessed jointly.

• Where creditworthiness is assessed automatically, the consumer has the right to so-called human intervention (i.e. they can request an explanation, present their view to the provider and request a review of the decision on whether or not the loan is granted).

• The provider must inform the consumer of their right to human intervention.

A breach of the duty to assess creditworthiness does not necessarily render the contract invalid. If the flaw in the assessment had LITTLE or NO IMPACT on the outcome, the contract should remain valid. At the same time, the amendment introduces a rebuttable presumption: if the consumer has repaid the loan, then they were creditworthy at the time the loan was granted. This shift in approach could significantly curb the undesirable practice of consumers who, after several years of trouble-free repayment, deliberately invoke a formal defect to claim invalidity of the agreement and demand repayment of interest already paid. Conversely, a consumer who has fallen victim to unfair practices by certain providers will continue to have the opportunity to rebut the presumption of their creditworthiness.

Author. Petra Bernklau