Stricter consumer credit rules tighten lending checks and advertising in Austria
Austria is tightening its consumer credit regulations, requiring banks and merchants to apply more rigorous credit assessments and stricter advertising standards.
Under the amended consumer credit law, Austria implements an EU directive that broadens regulatory coverage to tiny loans under 200 euros, interest-free credit and "Buy Now, Pay Later" financing, such as those offered by Klarna. Exceptions remain for short-term invoice payments of up to 14 days when the seller, not a payment intermediary, sets the terms. Creditors must conduct stricter creditworthiness checks, supply extensive pre-contract information, and are barred from approving loans after a negative assessment.
The right of withdrawal is limited to 12 months or 14 days after signing, unless the consumer was not informed of the right. Advertising must be prominently labeled and warn of credit risks, while mandatory product bundling is prohibited. Violations can lead to administrative fines, and industry experts warn that merchants may face higher compliance costs and reduced use of flexible payment options.
Why it matters
The changes raise consumer protection but could limit easy credit options and increase costs for shoppers and merchants.
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