The Chamber believes businesses need a transition period of at least 12 months to implement the new consumer credit requirements

The Estonian Chamber of Commerce and Industry submitted an opinion to the Ministry of Justice and Digital Affairs on the draft amendment to the Law of Obligations Act, which transposes the European Union's new Consumer Credit Directive into Estonian law. The Chamber proposed extending the transition period for businesses and setting its length at no less than 12 months from the adoption of the act.

The draft act introduces several new obligations for businesses
The first significant change explicitly extends consumer credit requirements to credit agreements provided free of charge. The requirements will therefore also apply to instalment payment agreements with no additional charges, i.e. 'buy now, pay later' agreements, which will mean new obligations and higher costs for businesses providing the service.

The second major change concerns the requirements for information provided to consumers. General information on consumer credit must be available to consumers at all times online or on a durable medium, and a new Standard European Consumer Credit Information form will be introduced for the provision of pre-contractual information. Pre-contractual information must be provided to consumers in a clear and comprehensible manner, and the first page of the form must set out the key credit details (e.g. the annual percentage rate of charge, interest rate and total amount of payments). The information must also be presented clearly in digital environments. In future, consumers will also have the right to choose the durable medium on which they wish to receive pre-contractual information. If the information is provided less than one day before the agreement is concluded, the consumer must be sent a separate reminder of the 14-day right of withdrawal after the agreement has been concluded.

The amendments also clarify the requirements for assessing creditworthiness. The creditor must assess the consumer's ability to repay on the basis of information requested from the consumer and other relevant sources, including registers. The assessment must not be based solely on the consumer's history of meeting previous payment obligations. Social media data must not be used for the assessment, and special categories of personal data, such as health data, must neither be collected nor used. If the consumer is not creditworthy, the creditor must, in certain cases, refer them for debt counselling.

In addition, practices for concluding agreements and marketing must be changed. Creditors must not presume the consumer's consent; rather, consumers must themselves give unambiguous and clear consent to conclude an agreement, meaning that pre-ticked boxes will be prohibited in future. Among other things, consumer credit advertisements must in future include the warning 'Caution! Borrowing money costs money.' or another equivalent expression.

Six months is not enough time for businesses to implement the requirements
The Chamber thanked the Ministry of Justice and Digital Affairs for partially taking into account its earlier proposal to provide businesses with a one-year transition period. In the Chamber's view, however, a six-month transition period is still insufficient from the perspective of businesses. The new requirements often necessitate changes to IT systems, customer communication processes and internal procedures, as well as staff training. Several changes are technically complex and require analyses, risk assessments, IT development and testing, meaning that their implementation may in practice take longer than six months. If the deadline is too short, there is a greater risk of errors and shortcomings in implementing the requirements.

Delays in transposition must not be borne by businesses
The ministry justified the shorter transition period on the grounds that a longer period would increase the risk of infringement proceedings against Estonia, as Estonia has not transposed the directive on time. The Chamber considers this justification insufficient. Under the directive, it was to be transposed by 20 November 2025 and must be applied from 20 November 2026. Market participants would therefore have had approximately one year to implement the new requirements if the legislative amendments had entered into force in accordance with the directive. However, the late preparation of the draft act leaves businesses with considerably less time. In the Chamber's view, it is not justified for businesses to bear the consequences of the delay in transposition. The Chamber therefore proposed a transition period of at least 12 months from the adoption of the final text of the act and its publication in the Riigi Teataja.