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Galateia KaloutaPart II, Specific Aspects of Directive 2008/48/EC2.1 Implementation of Specific Aspects of the Directive which changed from the1987 Directive of Consumer Credit2.1.1. Fully harmonised Aspects2.1.1.1. About the duty to provide pre-contractual information to the consumer(Art. 5 and 6 Directive 2008/48/EC)(1) Cyprus has simply incorporated the Standard European Consumer CreditInformation, exactly as it is to be found in Annex II of the Directive.(2) Prior the enforcement of the 2008 Directive, the national regime aboutconsumer’s credit used to be regulated through the Law 39 (I)/2001 andit’s amendments which were Law 166 (I)/2001, Law 34 (I)/2002, Law 77(I)/2002 and Law 33 (I)72004.According to the previous national regime the creditor was not obliged togive pre-contractual information, so that the consumer could comparebetween the different offers and so that he therefore would be able to takean informed decision upon credit agreements.On the other hand the creditor of a home loan was, according to theprevious national regime, obliged to give pre-contractual information, dueto the Commission Recommendation of 1 March 2001 on pre-contractualinformation to be given to consumers by lenders offering home loans(2001/193/EC). Because of the Commission’s Recommendation mentionedabove, the Standard European Consumer Credit Information had beencreated, which the Banks in Cyprus subsequently adopted and thereforeprovided to their customers, but only in cases of home loans.In other words, SECCI was already known in Cyprus as it was alsopreviously in use but only especially for home loans (according to theCommission Recommendation 2001/193/EC). Since the enforcement ofthe Directive 2008/48/EC the scope of SECCI has been substantiallyexpanded, in order to cover other kind of credits also.(3) An opposition towards SECCI before or even after the implementation ofthe Directive has not really been documented. The Association of CyprianBanks had only commented, before its implementation, that its membersalready fulfilled their obligations in accordance to the CommissionRecommendation 2001/193/EC, as they provided their customers with it incase of home loans.2.1.1.2. Contractual information to be written into the credit agreement, article10, 2008/48/EC.Art. 10 of the Directive 2008/48/EC, has been implemented in the Cyprianlegislation as it is. In comparison to the previous law, it extends the possibilitiesof data carriers, which may be appropriate for a credit agreement. As per theprevious law, valid credit agreements had to be written only on paper (Art. 8 aLaw 39 (I) 2001). A copy or an original of the credit agreement had to be handedpersonally to the consumer during the conclusion of the agreement or it should
Galateia Kaloutabe sent to him as registered within 10 days since the conclusion of the agreement(Art. 8 c i and ii).On the other hand, Art. 10, 2008/48/EC is much more detailed and therefore itcan only be considered as a gain for the Cyprian legislation, as the provisions ofthe previous Law concerning the form of the credit agreement were neither thatexplicit nor that particular as Art. 10, 2008/48/EC is.2.1.1.3. Right of withdrawal for the consumer until 14 days after the conclusion ofthe credit agreement, article 14, 2008/48/EC.Once again the Directive regulates a more consumer friendly provision, asaccording to the previous Law (Art. 8 d Law 39 (I) 2001), the right of withdrawalhad to be exercised within a smaller time period, namely within 10 days since thecustomer had received either a copy or the credit agreement itself in original.But the customer due to another separate agreement he had agreed upon, couldexpress beforehand his wish of not making use of his right of withdrawal. Thatmeans that afterwards he would not be able to change his mind and make use ofsuch a right.2.1.1.4. Conditions of early repayment, article 16, 2008/48/EC.Art. 16, Cyprian Law 107 (I)/ 2010 of consumer’s credit agreements correspondsword by word to Art. 16, 2008/48/EC.As per the previous legislative Act, the consumer was again entitled to dischargehis obligations at a prior point therefore he should hand in a writtenannouncement to the creditor notifying his intention to resign from the creditagreement. He was moreover entitled to a reduction in the total cost of thecredit, from which reduction an amount of 5-10% would be then deducted foradministrative costs (Art. 23 Law 39 (I) 2001).The exceptions to the compensation obligation in case of an early repayment asprovided in Art. 16 par. 3 lit. a-c Directive 2008/48/EC, about the frame of thecompensation that can be claimed, are provisions that were not at all foreseen inthe previous law and therefore its enforcement certainly raises the level ofconsumer protection. The previous Law expected solely that the compensationimplemented by the Court had to be adequate (Art. 26 Law 39 (I) 2001).2.1.1.5. Calculation method for the Annual Percentage Rate of Charge (APR),article 19, 2008/48/EC.The basic mathematical equation in order to calculate the annual percentage rateof charges according to the previous law, as it is shown in its Annex II, used to bethe following:K =mK‘ =m‘Σ Aκ/(1+ i) tk = Σ A’κ’/(1+ i) tk \K═1K‘═1Art. 19, par. 2 of the Directive and, therefore, also Art. 19 par. 2 of the new Lawconform completely with the content of Art. 1 par. a and b in Annex IV of theprevious legislative act, which means that any charges due to non-compliance of
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