As we have already informed, with effect from 01.12.2016, Act No. 257/2016 Coll., on Consumer Credit, entered into force, which significantly affected the regulation of the consumer credit market. In connection with this new Act, several questions have arisen which may have substantial impacts also on entities engaged in electronic commerce. A trader may find himself in a situation where, according to the definition in the Act, his activity fulfils the characteristics of intermediation of consumer credit, even though he did not intend this. In such a case, his business activity must then satisfy all the conditions for intermediation pursuant to the Act on Consumer Credit, including obtaining authorisation for this activity.
Pursuant to the provisions of Section 3(1)(b) of the Act on Consumer Credit, intermediation of consumer credit means, inter alia, merely offering the possibility to conclude a consumer credit agreement or carrying out preparatory work aimed at concluding a consumer credit agreement or providing recommendations which could lead to the conclusion of a consumer credit agreement. In some cases, intermediation may also include the mere provision of information on a credit product, which may be provided, for example, on the websites of sellers or providers of services other than financial services.
The regulation of the new Act shall not apply to the mere provision of general information on consumer credit products or similar information on providers or intermediaries, provided that the purpose of such activity is not to assist in the conclusion or performance of a consumer credit agreement (so-called tipping). The delimitation of the boundary between so-called tipping, which is not subject to the new Act, and intermediation is relatively difficult, yet crossing this boundary means the necessity to adapt one’s activity to the regulation of the Act on Consumer Credit (in particular obtaining authorisation for the activity of an intermediary).
The Czech National Bank has previously addressed the difference between so-called tipping and intermediation and adopted a position thereon entitled “On the delimitation of the boundary between tipping and insurance intermediation” dated 10.05.2011, which it will continue to uphold also now within the framework of supervision over the consumer credit market. Following the said position, our office received on 18.11.2016 a statement from the Czech National Bank, in which it was confirmed to us that “the activity of a ’tipper’ must not exceed the boundary where, in general terms, it ascertains the consumer’s interest in possibly concluding a credit agreement, or interest in a particular type of consumer credit, and passes on this information together with the prospective client’s contact details to a provider or intermediary of consumer credit. Thus, if the website were to have only an informational character, with a contact form or hypertext link to a provider or intermediary of consumer credit prepared for prospective clients, this would constitute only ’tipping'.
Intermediation, on the other hand, will also include inducing interest in concluding a credit agreement or providing assistance in its conclusion. Intermediation therefore also includes such activities where a credit applicant is provided with information on the characteristics of a specific product (e.g. information on a specific lending interest rate, the amount of monthly instalments, etc.) or where an analysis of products is carried out with a final recommendation, with the aim of leading the credit applicant to conclude a specific product (e.g. statements of the type ‘we recommend to you’, ’tip’, ‘most advantageous’, etc.).
The above-mentioned boundary is therefore exceeded by activities which are not directed only at identifying (’tipping off’) a prospective client, but also at acquiring him (or persuading him in the form of a mental decision or serious interest in concluding a more specifically defined product), including in the form of recommending a particular product. Intermediation would thus be considered to include cases where a prospective client proceeds to contact a selected consumer credit provider for the purpose of enquiring about a specific product for which he decided on the basis of information provided by the intermediary, this being preceded, for example, by an analysis of the product (especially if the individual characteristics of the prospective client were taken into account) and the product was directly or indirectly recommended. Such intermediation may take, for example, the form of a link to the provider’s website or the form of a contact form.”
Having regard to the above, it is possible to state that where a trader wishes to offer specific credit products on his website, such activity should be assessed as credit intermediation. For such activity it is necessary to obtain authorisation from the Czech National Bank, and the processing of such authorisation is not entirely straightforward in practice.
Alžbeta Hudáková
Law Office Mašek, Kočí, Aujezdský www.e-Advokacie.cz – online legal advice
This text was originally prepared by the law office Mašek, Kočí, Aujezdský in cooperation with the association Association for Electronic Commerce (APEK) as legal circular No. 1/2017 intended for members of this association.
This text was translated from Czech to English using an AI translator.