An important initiative through which the Ministry of Development seeks to strengthen the of citizens against abusive and misleading practices, is the new <a href="https://tomanifesto.gr/draft bill to safeguard the rights of consumers, promoted by the Minister of Development Takis Theodorikakos and which has been put out for public consultation.

The new legislative initiative aims to create a more fair, secure, rigorous, and transparent framework, incorporating four European directives concerning consumer credit, distance contracts, the green transition, and the right to repair.

The important thing is that the Ministry of Development is adding additional protective measures, beyond the EU directives. 

Which borrowers does the Consumer Credit Directive apply to

The regulations cover loan agreements without real estate collateral (e.g., a mortgage), i.e., loans that are not secured by a mortgage or other asset. These are mainly consumer loans, home improvement loans, and credit cards, for amounts up to 100,000 euros. This means it covers the majority of households’ day-to-day financing from banks.

An end to the “fine print”

One of the key problems the bill aims to address is the use of difficult-to-understand contract terms and hidden fees. From now on, contract terms must be clear and accessible to the average consumer, so that there are no traps or misunderstandings leading to additional financial burdens.

Mandatory transparency in banking contracts

The Ministry of Development places particular emphasis on the transparency of banking contracts. Banks will now be required to present, in a clear and understandable manner, all fees, interest rates, commissions, and the risks that a loan may entail. Full consumer information is a fundamental prerequisite for a healthy financing market.

Making the 14-day right of withdrawal clearer to borrowers

Every borrower already has the right to withdraw within 14 days of signing the contract, and now the framework is becoming clearer and more transparent. Any citizen may cancel the loan without penalties or obligation to provide justification, provided they determine that the terms do not suit them or if they change their mind. This provision strengthens consumers’ bargaining position and aligns Greek legislation with European consumer protection standards. The principle is that just as it is easy to enter into a contract, it must also be easy to exit it.

Strengthening customer service

Regarding the 2nd European Directive on distance contracts, in an era where banking services are becoming increasingly digital, the bill provides that citizens will have the right to speak with a live person when requesting human assistance. They will not be required to interact solely with automated systems or chatbots, which is particularly important for the elderly and vulnerable social groups.

A double safety net for consumers: Establishment of caps on the interest rate and the total cost of the loan

One of the most important provisions is the introduction of a cap on the total annual effective interest rate (APR), which may not exceed 30% to 50% of the APR, as published on a quarterly basis by the Bank of Greece. The exact percentage will be determined by a decision of the Minister of Development and the Minister of National Economy and Finance, in consultation with the Governor of the Bank of Greece. In addition, limits are set on the amount by which the principal of the loan may increase during repayment. Specifically, the final amount to be paid by the borrower, excluding credit cards, may not exceed 60% for loans of up to 4 years, 70% for loans over 4 years and up to 8 years, and 75% for loans over 8 years.

Addressing household over-indebtedness

This cap aims to put the brakes on situations where interest, fees, and charges led to a disproportionate increase in the final debt. For years, thousands of borrowers found themselves paying much more than they had originally calculated. The new regulation aims to ensure predictability and control over the final cost.

Right to be forgotten for cancer survivors

Credit institutions are prohibited from using personal data related to a consumer’s cancer diagnosis for the purposes of an insurance contract linkedto a credit agreement, provided that five years have elapsed since the completion of their treatment. This regulation facilitates equal access for consumers to credit products and eliminates potential discriminatory treatment. 

Timeline for the implementation of the Consumer Credit Directive

The full implementation of the directive concerning loan agreements will take effect on and after November 20.

Tightening of the framework for so-called “eco-friendly products”

Directive 2024/85 aims to further strengthen consumer protection. New clear and specific provisions and definitions are introduced, such as the concepts of “environmental claims,” “sustainability labels,” and the “durability” or “repairability” of goods, with the aim of addressing misleading practices that create a false image of environmental responsibility (greenwashing) and unduly influence consumer behavior and competition.

The directive prohibits misleading environmental claims and aims to improve information on key technical characteristics of products such as durability, repairability, lifespan, and reusability. The long-term goal is to foster a consumer culture that supports the circular economy and helps reduce the environmental footprint. The date of application of this directive is September 27, 2026.

Strengthening the “right to repair”

Directive 2024/1799 aims to strengthen consumers’ right to repair their products rather than replace them prematurely, with the goal of reducing waste and overconsumption. The “right to repair” is being established. The seller is obligated to inform the consumer of their right to choose between repair and replacement, as well as of the extension of the limitation period.

The product categories, in accordance with the directive, are as follows: household washing machines, household dishwashers, refrigerators, household clothes dryers, monitors and televisions, vacuum cleaners, servers and data storage products, mobile phones, cordless phones, and computers—tablets, welding equipment.

It has no retroactive effect

It should be emphasized that it will have no retroactive effect, meaning that it does not apply to loan agreements that have already been concluded.