Danish Credit Agreement Act

The Danish Credit Agreement Act: A Comprehensive Guide

The Danish Credit Agreement Act (Kreditaftaleloven) governs all consumer credit agreements in Denmark. It sets out the legal framework under which creditors can provide credit to consumers in Denmark.

In this article, we will delve into the specifics of the Danish Credit Agreement Act and what it means for consumers and creditors alike.

Scope of Application

The Danish Credit Agreement Act applies to all credit agreements between creditors and consumers in Denmark. It covers a wide range of credit agreements, including:

– Consumer loans

– Credit card agreements

– Hire-purchase agreements

– Leasing agreements

– Overdraft facilities

– Credit limits

Creditors must comply with the provisions of the Danish Credit Agreement Act when providing credit to consumers. Failure to comply with the Act can result in significant fines and even criminal liability.

Key Provisions of the Danish Credit Agreement Act

The Danish Credit Agreement Act includes a number of key provisions that creditors and consumers should be aware of. These include:

1. Disclosure Requirements

Creditors must provide consumers with certain information before entering into a credit agreement. This information includes:

– The total amount to be repaid

– The annual percentage rate (APR)

– The total cost of credit

– The repayment schedule

– Any fees or charges associated with the credit agreement

2. Right of Withdrawal

Consumers have the right to withdraw from a credit agreement within 14 days of signing the agreement. Creditors must inform consumers of their right to withdraw and provide them with instructions on how to exercise this right.

3. Early Repayment

Consumers have the right to repay their credit agreement early, in part or in full, at any time. Creditors cannot charge consumers any fees or charges for early repayment.

4. Interest Rate Caps

The Danish Credit Agreement Act sets limits on the interest rates that can be charged on consumer credit agreements. The maximum interest rate that can be charged is currently 25%.

Enforcement of the Danish Credit Agreement Act

The Danish Financial Supervisory Authority (Finanstilsynet) is responsible for enforcing the Danish Credit Agreement Act. The Authority has the power to conduct inspections and investigations to ensure that creditors are complying with the Act.

Consumers who believe that a creditor has violated the Danish Credit Agreement Act can also make a complaint to the Authority. The Authority has the power to impose fines and other sanctions on creditors who breach the Act.

Conclusion

The Danish Credit Agreement Act is an important piece of legislation that provides consumers with a level of protection when entering into credit agreements. Creditors must comply with the Act`s provisions when providing credit to consumers, and failure to do so can result in significant sanctions.

Consumers should always read the terms and conditions of any credit agreement carefully and ensure they understand the information provided to them before signing. If in doubt, consumers should seek legal advice or contact the Danish Financial Supervisory Authority for further information.