Minister lauds benefits of consumer credit rules

Competitiveness Minister Censu Galea said yesterday that consumers must think about the complete cost of a deal before deciding on it.

Speaking during a seminar about consumer credit regulations, the minister said such regulations were of interest to both consumers and traders.

"If a consumer is being given credit for the purchase of a product, he would want to know the implications and his rights. Similarly, traders would want to know their obligations when granting credit to consumers," he said.

Mr Galea said the EU's Consumer Credit Directive aims to create an environment where consumers are sufficiently protected throughout the European Union so that they can carry out cross-border transactions with confidence. The new consumer credit regulations were aimed to make credit terms more transparent and set out parameters for charges imposed by the lender.

The regulations, which were published in March, will be beneficial to consumers for a number of reasons. Consumers will be better able to compare products. A standard was set for calculating the annual percentage rate of credit facilities, said the minister.

"If consumer credit regulations are biased in favour of either businessmen or consumers, it would not be beneficial to the economy.

"If such regulations favour businessmen, consumer confidence could slip and affect trade negatively. If such regulations impose unnecessary burdens on businessmen, traders might be put out of business and this situation could make way for others to become dominant, and hence abuse their position," he said.