I OVERVIEW

Consumer finance law generally refers to all laws and regulations governing the retail financial services industry. They cover a broad range of financial products and services for consumers, such as payments, savings, credit, investments and insurance.

The Belgian legislator (as well as legislators worldwide) has long been of the opinion that protective and corrective legislative measures should be put in place to address a consumer’s inferior position (as opposed to businesses) with regard to knowledge, expertise and experience in the financial sector. Particularly in the aftermath of the financial crisis of 2007–2008, Belgian policymakers have been focusing on stronger consumer protection, together with better financial education, in order to achieve financial stability.2 Considering the significant potential detriment that financial services can cause to individual consumers and to the financial markets, improved protection for consumers in financial markets is also a key preoccupation of the European Union.3

For the past decade, the traditional consumer finance landscape has been challenged by new digital technologies. In particular, constant developments in the area of financial technology (fintech) are fundamentally changing the financial services industry.4 Fintech uses technology to provide products and services in the financial sector and reshapes the way these products and services are structured, provisioned and consumed.5 Fintech offers many advantages: it enhances customer experience (faster, better, cheaper), it introduces new ways to provide and make use of financial products and services (e.g., mobile payments, online lending platforms and automated advice), it enhances the availability and accessibility of financial products and services (24/7 via the internet, the cloud), it improves efficiency, etc. The fintech evolution has also opened the door to new players in the financial sector (i.e., fintech companies) that are challenging the traditional players (particularly banks) and their monopoly in the financial sector. While some of these fintech companies may disrupt the traditional European financial market (the ‘disruptors’), there are also many fintech companies that act as ‘enablers’ and could thus be of service to the traditional financial players. There are more and more initiatives in the Belgian and European market involving cooperation between the traditional financial players and fintech companies. This allows fintech companies to benefit from the traditional players’ extensive customer base and expertise with complex regulation, while the traditional players can get an insight into new findings in the field of technology and consumer experience in order to improve their products and services. Some authors, regulators and governments (including the Belgian ones) therefore prefer to refer to ‘tech for fin’ instead of ‘fintech’.

Belgium has historically led the way in new technologies supporting the financial sector, particularly with regard to electronic banking (Bancontact, Isabel, Swift, MasterCard). However, in January 2016, the Belgian High Level Expert Group on the Future of the Belgian Financial Sector expressed the need for Belgium to foster an environment that stimulates the growth of fintech in order for Belgium to maintain its leading position.6 As such, the High Level Expert Group invited the Belgian financial regulators7 to assess the desire for a light-touch regulatory regime in order to lower the barriers to entry for new players. The Financial Services and Markets Authority (FSMA) and the National Bank of Belgium (NBB) have also recognised the benefits of fintech and identified fintech as an important focus of their supervisory activities. In this regard, the FSMA and the NBB have opened a fintech portal on their websites in order to support a direct dialogue between the regulators and companies in the innovative financial technology sector (whether start-ups or established firms).8 Moreover, since 2015, the FSMA has been chair of the Financial Innovation Standing Committee of ESMA.9 One of the other recommendations of the High Level Expert Group resulted in B-Hive, the successor of Eggsplore (founded by Jürgen Ingels and with Wim De Waele as CEO). B-Hive, supported by the Belgian government, is a European collaborative innovation fintech platform that brings together major banks, insurers and market infrastructure players. B-Hive aims to put Brussels on the map as the smart gateway to Europe and leverages on the opportunities offered by the digital transformation for the financial services industry.10

Given the many benefits and opportunities that come along with the digital transformation, the Belgian regulator is keen to promote the development of the fintech sector. However, the area of financial services remains complex and measures to ensure consumer protection and financial stability remain required. Moreover, legislation is often not yet adapted to new technologies. Hence, the regulator is challenged to ensure sufficient regulation and supervision. Digital innovations in the financial services sector also raise new concerns with regard to security (particularly in terms of fraud, identity theft and cybercrime). The Belgian regulator faces the challenge of finding a balance between a supportive approach, (i.e., encouraging digital innovation in the financial industry) and a protective approach (i.e., ensuring consumer protection and financial stability).11

II LEGISLATIVE AND REGULATORY FRAMEWORK

i Legislation

The regulatory framework for financial services is largely harmonised at the European level by means of directives and regulations. Hereinafter, the focus will be on consumer payment, deposit and lending services.

Payment services

For some time, the main piece of EU legislation governing the retail payments market was the Payment Services Directive12 (PSD1). This directive has been repealed and replaced by the Second Payment Services Directive13 (PSD2) with effect from 13 January 2018. PSD2 is complemented by Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange fees for card-based payment transaction. PSD2 aims to respond to the significant technical innovations in the retail payments market and the emergence of new types of payment services.

At the date of drafting this chapter, PSD2 has not yet been transposed into Belgian law. The current Belgian regulatory framework for payments and related services consists of (the Payment Services Regulations):

  • a Title 3 ‘Payment Services’ of Book VII ‘Payment and Credit Services’ of the Code of Economic Law; and
  • b the Act of 21 December 2009 on the status of payments institutions and electronic money institutions, access to the activity of payment service provider and the issuance of electronic money and the access to payments systems.
Deposit-taking

The business of taking deposits or other repayable funds from the public is regulated at the EU level by the Capital Requirements Directive.14 This directive has primarily been transposed into Belgian law by means of the Act of 25 April 2014 on the status and the supervision of credit institutions and listed companies (the Banking Act).

Persons or undertakings that are not (duly authorised) credit institutions are generally prohibited from taking deposits or other repayable funds from the public. Credit institutions are undertakings whose business is to take deposits or other repayable funds from the public and to grant credits for its own account. Attention is drawn to the two cumulative criteria, taking deposits and granting credit, which represent the basic activities of credit institutions.

Consumer lending services

Consumer credit services are regulated at the EU level by means of the Consumer Credit Directive15 and the Mortgage Credit Directive.16 These directives have been transposed into Belgian law by means of Title 4 ‘Credit Agreements’ of Book VII ‘Payment and Credit Services’ of the Code of Economic Law (the Credit Regulations).

Consumer credit is defined as credit, regardless of the name or form, that is being granted to the consumer, except mortgage credit. The rules on consumer credit can be found in Chapter I of the Credit Regulations (the Consumer Credit Regulations).

Mortgage credit is defined as:

    • a ‘mortgage credit with a movable purpose’: a credit agreement secured by a mortgage security that is not intended for financing the acquisition or the preservation of immovable property rights or the refinancing of such credit agreements; and
    • b ‘mortgage credit with an immovable purpose’: a credit agreement secured by a mortgage security that is intended for the financing of the acquisition or preservation of immovable property rights or the refinancing of such credit agreements. A credit agreement that is not secured by a mortgage security but is intended for the financing of the acquisition or preservation of immovable property rights, with the exception of the renovation of immovable property, or a credit agreement with regard to barges also qualifies as mortgage credit with an immovable purpose.

The rules on mortgage credit can be found in Chapter II of the Credit Regulations (the Mortgage Credit Regulations).

ii Supervision

In Belgium, the supervision of the financial sector is entrusted to three different authorities, each of which has a specific set of objectives and competences: the NBB, the FSMA and the Federal Public Services Economy, SMEs, Self-Employed and Energy (FPS Economy).

The National Bank of Belgium and the Financial Services and Markets Authority

The NBB is responsible for ensuring the macro- and microeconomic stability of the financial system. As such, the NBB is also responsible for the individual prudential supervision of the financial actors that may hold client money (including credit institutions and payment institutions).

The FSMA is responsible for:

  • a overseeing financial markets and supervising company information;
  • b supervising financial products;
  • c supervising compliance by financial institutions with the rules of conduct;
  • d supervising a wide range of financial service providers and intermediaries;
  • e contributing to the financial education of savers and investors; and
  • f supervising supplementary pensions.17

Among others, the FSMA is responsible for the supervision of consumer and mortgage credit providers.

The NBB and the FSMA have wide powers and competences for the purposes of carrying out their supervisory tasks:18

  • a The NBB and the FSMA can issue regulatory instruments, such as circulars and communications, to explain and interpret legislation. With these regulatory instruments, the NBB and the FSMA indicate how they will apply the rules.
  • b The NBB and the FSMA can impose a variety of preventive and corrective measures.
  • c The NBB and the FSMA can ask undertakings under their supervision to provide relevant documentation and information, and can conduct on-site inspections in order to verify compliance with all the rules (including by the use of mystery shoppers).
  • d Where a financial service provider (e.g., payment institution or creditor) offers services without the required registration or authorisation, the NBB and the FSMA can publish a warning to advise the public.
  • e If the NBB and the FSMA determine that a financial service provider no longer fulfils the conditions for registration or authorisation, they may take administrative measures. The most severe measure is revoking the authorisation (whereby the undertaking may no longer carry out its activities).
  • f The NBB and the FSMA can also impose administrative sanctions (such as fines and other penalties) for infringements of financial legislation.
FPS Economy

Whereas the NBB and the FSMA supervise providers of financial services (such as payment institutions and creditors) in terms of licensing, operating and conduct of business requirements, the FPS Economy is entrusted with the supervision of such providers’ compliance with the substantive rules governing financial products and services, including the Payment Services Regulations and Credit Regulations. As part of these supervisory powers, for example, creditors have to submit their model mortgage and consumer credit agreements to the FPS Economy for prior approval.

The FPS Economy’s main mission is to detect and identify breaches of the financial rules and regulations. In this regard, the FPS economy is allowed to use mystery shoppers. In case of an infringement, the FPS Economy can take various measures, such as issuance of a warning, reaching an administrative settlement and seizing the goods of an infringer. The FPS Economy can refer its findings to the NBB and the FSMA, which will subsequently impose appropriate administrative sanctions.

III PAYMENTS

i Overview

The provision of payment services is a regulated activity. First, this means that payment service providers need to obtain authorisation from the NBB (or the competent authority of the home Member State). Such authorisation is valid for the whole of the European Economic Area. In addition, the Payment Services Regulations lay down rules concerning transparency conditions and information requirements for payment services, as well as the respective rights and obligations of payment service users and payment service providers in relation to the provision of payment services.

The current Payment Services Regulations and Payment Institutions Act (which have not yet implemented PSD2 at the date of drafting this chapter) provide for a limited list of payment services:

  • a services enabling cash to be placed on a payment account and all the operations required for operating a payment account;
  • b services enabling cash withdrawals from a payment account and all the operations required for operating a payment account;
  • c the execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, including:

• execution of direct debits, including one-off direct debits;

• execution of payment transactions through a payment card or a similar device; and

• execution of credit transfers, including standing orders;

  • d execution of payment transactions where the funds are covered by a credit line for a payment service user:

• execution of direct debits, including one-off direct debits;

• execution of payment transactions through a payment card or a similar device; and

• execution of credit transfers, including standing orders;

  • e issuing or acquiring payment instruments;
  • f money remittance; and
  • g execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

Certain activities are expressly exempt from the scope of the Payment Service Regulations.19 Such activities include:

  • a payment transactions made exclusively in cash directly from the payer to the payee, without any intermediary intervention;
  • b payment transactions from the payer to the payee through a commercial agent authorised to negotiate or conclude the sale or purchase of goods or services on behalf of the payer or the payee;
  • c services provided by technical service providers, which support the provision of payment services, without them entering at any time into possession of the funds to be transferred, including processing and storage of data, trust and privacy protection services, data and entity authentication, information technology (IT) and communication network provision, and the provision and maintenance of terminals and devices used for payment services;
  • d services based on instruments that can be used to acquire goods or services only in the premises used by the issuer or under a commercial agreement with the issuer either within a limited network of service providers or for a limited range of goods or services; and
  • e payment transactions executed by means of any telecommunication, digital or IT device, where the goods or services purchased are delivered to and are to be used through a telecommunication, digital or IT device, provided that the telecommunication, digital or IT operator does not act only as an intermediary between the payment service user and the supplier of the goods and services.
ii Recent developments

With the emergence of innovative digital technologies, payment solutions are transforming every day. The internet and mobile devices (such as smartphones and tablets) have become key elements in consumers’ day-to-day lives. The traditional payment methods, such as cash payments and bank wire transfers are increasingly being surpassed by new digital payment methods, such as online and mobile payments.20

These developments have given rise to significant challenges from a regulatory perspective. In particular, the EU considered that:

developments have given rise to significant challenges from a regulatory perspective. Significant areas of the payments market, in particular card, internet and mobile payments, remain fragmented along national borders. Many innovative payment products or services do not fall, entirely or in large part, within the scope of [PSD1]. Furthermore, the scope of [PSD1] and, in particular, the elements excluded from its scope, such as certain payment-related activities, has proved in some cases to be too ambiguous, too general or simply outdated, taking into account market developments. This has resulted in legal uncertainty, potential security risks in the payment chain and a lack of consumer protection in certain areas. It has proven difficult for payment service providers to launch innovative, safe and easy-to-use digital payment services and to provide consumers and retailers with effective, convenient and secure payment methods in the Union. In that context, there is a large positive potential which needs to be more consistently explored.21

In order to respond to the developments in the retail payments landscape, particularly rapid technological changes, PSD2 was adopted. PSD2 entered into force on 12 January 2016 and takes effect from 13 January 2018. As at the time of writing, however, PSD2 has not yet been transposed into Belgian law.

PSD2 extends the scope of regulation to cover two new types of third-party payment service providers:

  • a payment initiation service: a service to initiate a payment order at the request of the payment service user with respect to a payment account held at another payment service provider; and
  • b account information service: an online service to provide consolidated information on one or more payment accounts held by the payment service user with either another payment service provider or with more than one payment service provider.

The list of activities that are exempt from the scope of the regulations is narrowed down.

PSD2 further introduces enhanced security requirements.

IV DEPOSIT ACCOUNTS AND OVERDRAFTS

i Overview
Access to banking services

In modern society, having a payment account is indispensable for consumers’ day-to-day lives. A payment account enables consumers to make and receive payments, purchase goods or services online, pay bills, obtain credit, etc.22 Hence, when people are excluded from having a payment account, they are isolated from society.

In 1996, the banks in Belgium already adopted the ‘Charter regarding a basic banking service’. With this Charter the banks (voluntarily) agreed that any person who is domiciled in Belgium could open an account and engaged themselves to offer the ‘basic banking service’. This basic banking service included the execution of transfers, enabling cash deposits and withdrawals, and issuing bank statements.23

In 2001, the Belgian legislator considered that the right to financial services, in particular the access to financial banking services, is a fundamental right and that it should be guaranteed by law.24 Consequently, on 24 March 2003 the Act on the implementation of a basic banking service was adopted, which ensured the offering of basic banking services free of charge.

Today the rules on the basic banking service can be found in Chapter 8 ‘Basic Banking Service’ of Title 3 ‘Payment Services’ of Book VII ‘Payment and Credit Services’ of the Code of Economic Law. In accordance with Article VII.57 of the Code of Economic Law, every credit institution is required by law to offer the basic banking service and every consumer is entitled to the basic banking service. The ‘basic banking service’ is defined as ‘a payment service which includes the following services’:

  • a services enabling cash to be placed on a payment account and all the operations required for operating a payment account;
  • b services enabling cash withdrawals from a payment account and all the operations required for operating a payment account; and
  • c the execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider, including:

• execution of direct debits, including one-off direct debits;

• execution of payment transactions through a payment card or a similar device; and

• execution of credit transfers, including standing orders.

The annual fee charged for the basic banking service may not exceed €15.76.

A credit institution may reject an application for a basic banking service or revoke a basic banking service only where the consumer:

  • a already has a basic banking service;
  • b already has a payment account (even with another credit institution);
  • c already has an account or accounts for a total amount exceeding €6,000 per year; or
  • d has committed fraud, misuse of trust, fraudulent bankruptcy, forgery or money laundering.

When a credit institution rejects or revokes an application for a basic banking service the credit institution will have to inform the consumer of the complaints and out-of-court redress procedures that the consumer can rely on, and the information details of ‘Ombudsfin’ (which is the competent body to deal with such complaints procedures). The credit institution will also have to inform Ombudsfin immediately of its decision to reject or revoke. Ombudsfin can annul the decision taken by the credit institution or order another credit institution to provide the basic banking service.

Deposit guarantees

Deposit guarantee schemes have attracted much attention in the aftermath of the financial crisis. Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes has been implemented into Belgian law by means of the Act of 22 April 2016 transposing Directive 2014/49/EU on deposit guarantee schemes and containing various provisions. In particular, this Act has amended the Banking Act as well as the Royal Decree of 14 November 2008 on the implementation of the crisis measures provided for by the Act of 22 February 1998 on the organic status of the National Bank of Belgium, with regards to the establishment of the Guarantee Fund for Financial Services (the Guarantee Fund).

In Belgium, the deposit guarantee scheme has been established within the Deposit and Consignation Office of the Federal Public Services Finances: the Guarantee Fund. The Banking Act requires all Belgian credit institutions to participate in the Guarantee Fund. The Guarantee Fund ensures the protection of funds held by depositors, savers and investors in case of default of the institution. In particular, the Guarantee Fund provides for a guarantee of €100,000 per depositor per institution.

Overdrafts

Overdrafts allow consumers to draw down funds that exceed the current balance in the consumer’s current account. If the overdraft has been explicitly agreed, it is called an ‘overdraft facility’. If the overdraft has been tacitly accepted (without an explicit agreement) it is called ‘overrunning’. Qualifying as a consumer lending service, overdrafts fall within the scope of application of the Credit Regulations,25 albeit under a light-touch regime.

In case of overrunning, the law requires a creditor to notify the consumer when the overrunning exceeds €1,250 and lasts more than a month. If the overrunning has not been repaid within three months, the creditor is obliged to suspend any drawdowns under the credit facility and put an end to the credit agreement, or conclude a new credit agreement providing for a higher total amount of credit.

ii Recent developments
Access to banking services

On 14 December 2017, the Belgian parliament adopted the draft Act amending and implementing provisions regarding payment accounts and payment services in various books of the Code of Economic Law. This Act aims to transpose Directive 2014/92/EU of the European Parliament and of the Council of 23 July 2014 on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features. As at the time of writing, the Act is yet to be ratified by the King. It will enter into force on the 10th day after the publication in the Belgian Official Gazette.

Chapter 8 ‘Basic Banking Service’ will be amended with a view to transposing Chapter IV of the Directive into Belgian law. Among others, there will be an explicit requirement for credit institutions not to discriminate against consumers by reason of their nationality, place of residence or by reason of any other ground as referred to in the Act of 30 July 1981 penalising actions motivated by racism or xenophobia. Furthermore, the conditions applicable to holding a payment account with basic features may be in no way discriminatory. This means that access to the basic banking services should be ensured irrespective of the consumers’ financial circumstances, such as their employment status, level of income, credit history or personal bankruptcy.

PSD2

In order to enable payment service providers to provide payment services, it is indispensable that they have the possibility to open and maintain accounts with credit institutions.26 Under PSD2, credit institutions are required to grant payment institutions access to their payment accounts services on an objective, non-discriminatory and proportionate basis. Such access must be sufficiently extensive as to allow payment institutions to provide payment services in an unhindered and efficient manner.

V REVOLVING CREDIT

i Overview

Belgian law does not define ‘revolving credit’ as such. However, revolving credit is a specific type of ‘credit facility’, which is defined by Article I.9, 48 of the Code of Economic Law as any credit agreement, regardless of the name or form, whereby a creditor makes available to a consumer purchasing power, money or any other means of payment and the consumer can use the credit by one or more drawdowns, among others, by means of a payment instrument or any other means, and the consumer commits himself to repaying the credit as agreed. In case of revolving credit, the consumer can redraw again any amounts repaid. Where the possibility to redraw the credit is subject to the prior consent of the creditor or conditions other than those initially agreed, the redrawing will be considered to constitute a new credit agreement.

Revolving credit, as a type of consumer credit, falls within the scope of application of the Credit Regulations (both consumer credit and mortgage credit). As such, only duly licensed creditors can grant such credit and only duly licensed credit intermediaries can intermediate such credits. Moreover, the credit agreement will need to comply with the substantive provisions of the Credit Regulations, including rules on advertising, pre-contractual information and advice requirement, creditworthiness assessment, mandatory contractual provisions, interest rates and costs, etc.

The Credit Regulations require the implementation of a ‘zero setting’ for both revolving consumer credit and revolving mortgage credit agreements of indefinite duration or with a term of more than five years. In particular, such credit agreements will have to provide for a term by which the total amount of the credit facility must be repaid.27 The zero setting term will restart upon the first drawdown following the last zero setting.

With regard to revolving consumer credit and revolving mortgage credit with a movable purpose the creditor is required to regularly inform the consumer by means of a statement of account, on a durable medium, containing the following information:

  • a the precise period to which the statement of account relates;
  • b the amounts and dates of drawdowns;
  • c the total amount outstanding, and the date of the previous statement;
  • d the new total amount outstanding;
  • e the dates and amounts of payments made by the consumer;
  • f the applicable borrowing rate(s);
  • g the separate amounts of any charges;
  • h where applicable, the minimum amount to be paid and the interest due;
  • i where applicable, the outstanding balance due from the previous statement (except with regard to overdraft facilities);
  • j where applicable, the different dates of the charges due (except with regard to overdraft facilities); and
  • k the date and the amount of interest due for each borrowing rate, and information on the calculation method of the interest due on the amount outstanding (except with regard to overdraft facilities).

Often the revolving credit will be linked to a payment instrument, such as a credit card. The issuance of payment instruments is a regulated activity. As such, the creditor will also fall within the scope of application of the Payment Services Regulations.

ii Recent developments

The Central Individual Credit Register of the National Bank of Belgium records information relating to all consumer credits and mortgage loans, as well as any payment defaults resulting from these loans. The purpose of this registration is to strengthen the means of preventing the excessive indebtedness of private individuals.28 Creditors are required by law to consult the Central Individual Credit Register prior to the conclusion of a credit agreement with a consumer. The National Bank of Belgium publishes statistics regarding the information recorded in the Central Individual Credit Register on a monthly basis. The statistics for 2016 show that credit facilities represent more than 50 per cent of all credit agreements. In particular, in 2016 there were 6.24 million credit facilities for a total amount of over €17 million.29

VI INSTALMENT CREDIT

i Overview

Instalment credit is defined as any credit agreement, regardless of the name or form, whereby a creditor makes available to a consumer money or any other payment means and the consumer has to repay the credit in periodic payments. A typical example is a car financing agreement whereby the consumer obtains a credit that allows the consumer to purchase a car and stretch out the repayment over a longer period of time by instalments. Another example of an instalment credit is a student loan that allows students to pay their tuition fees in instalments. However, student loans are less common in Belgium because of the low tuition fees. Mortgage credits will generally have to be repaid by instalments and thus qualify as instalment credit. For example: traditional home loans (i.e., a credit intended for purchasing a house whereby the credit has to be repaid by monthly payments over a period of 30 years).

Instalment credit has been subject to regulation in Belgium for a long time. Mortgage credits were already regulated by the Royal Decree No. 225 of 7 January 1936 on the regulation of mortgage loans and ensuring supervision of undertakings granting mortgage loans. Instalment loans for consumers (except for mortgage loans) were already regulated by the Act of 9 July 1957 on the instalment sale and instalment loan. Today, instalment credit, as a specific type of credit, is subject to the general rules on mortgage and consumer credit, which can be found in the Credit Regulations.

The rules are twofold. On the one hand, persons granting (or intermediating in the granting of) instalment credits are subject to specific licensing and registration requirements. On the other hand, the Credit Regulations contain specific substantive provisions with regard to instalment credit agreements, including requirements on advertising, pre-contractual information and advising, credit-worthiness assessment, contractual rights and mandatory provisions, securities, etc.

ii Recent developments
Mortgage credit

The Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property has been transposed into Belgian law by means of the Act of 22 April 2016 amending and introducing provisions concerning consumer credit and mortgage credit in various books of the Code of Economic Law, which entered into force on 1 December 2016.

P2P lending

Peer-to-peer lending (P2P lending), a major trend in the fintech industry, generally refers to the practice whereby lenders and borrowers are directly matched through an online platform (without the need for an intermediary financial institution). In Belgium, however, P2P lending as such is still prohibited. First, persons or undertakings that are not credit institutions are generally prohibited from taking deposits or other repayable funds from the public. In addition, in accordance with current case law, persons who regularly borrow money to consumers by means of P2P lending will likely be subject to the specific licensing and registration requirements for creditors.30

VII UNFAIR PRACTICES

In Belgium, the provisions protecting consumers against unfair practices in the financial sector can be found in various laws and regulations.

First there is Book VI Market practices and consumer protection of the Code of Economic Law (Book VI), which implements Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and Directive 2011/83/EU on consumer rights. Book VI can be considered to constitute the lex generalis in relation to specific consumer finance laws and regulations. Book VI has provisions on advertising, (pre-contractual) information requirements, misleading and aggressive commercial practices and unfair contractual terms.

Book VI is supplemented by sector-specific legislation. Particularly the Credit Regulations contain extensive provisions on advertising, (pre-contractual) information requirements, unfair contractual terms, prohibited practices (e.g., tying practices), etc. The Credit Regulations are mainly derived from EU legislation.

Since 2014 Belgian law provides for the possibility to file a class action for breaches of the Payment Services Regulations and the Credit Regulations.

VIII RECENT CASES

i Enforcement actions

There is no publicly available information about any recent enforcement actions by the FSMA or the NBB against institutions for breach of consumer finance laws and regulations.31

ii Disputes before the regulator

There is no publicly available information about any significant recent complaints brought by or on behalf of consumers before the regulator or Ombudsfin. Ombudsfin’s annual report for 201532 shows that most of the complaints, that Ombudsfin receives, relate to payment accounts, payment cards, and the conclusion and execution of credit agreements (both consumer and mortgage credit).

iii Litigation

There is no publicly available information about any significant recent court cases concerning consumer finance.

IX OUTLOOK

Considering the massive digitisation of the local and international financial markets, with new technology solutions being invented each day, it is clear that fintech will continue to reshape the consumer finance landscape, whether as ‘enabler’ or ‘disruptor’.

1 Pierre E Berger is a partner and Pauline Kustermans is an associate at Baker McKenzie.

2 Directorate-General for Internal Policies, Consumer Protection Aspects of Financial Services, European Union, 2014, 18, www.europarl.europa.eu/RegData/etudes/etudes/join/2014/507463/IPOL-IMCO_ET(2014)507463_EN.pdf.

3 Directorate-General for Internal Policies, Consumer Protection Aspects of Financial Services, European Union, 2014, 14-15, www.europarl.europa.eu/RegData/etudes/etudes/join/2014/507463/IPOL-IMCO_ET(2014)507463_EN.pdf.

4 EPRS, Consumer Protection the EU, European Union, 2015, 9, www.europarl.europa.eu/RegData/etudes/IDAN/2015/565904/EPRS_IDA(2015)565904_EN.pdf.

5 World Economic Forum, The Future of Financial Services, 2015, www3.weforum.org/docs/WEF_The_future__of_financial_services.pdf.

6 Report of the High Level Expert Group, The Future of the Belgian Financial Sector, Brussels, 13 January 2016, 53.

7 I.e., the Financial Services and Markets Authority (FSMA) and the National Bank of Belgium (NBB).

8 www.fsma.be/en/Supervision/finbem/fintech.aspx.

9 European Securities and Markets Authority.

10 https://b-hive.eu/about-us.

11 www.euractiv.com/section/digital/news/commission-champions-laissez-faire-in-first-response-to-fintech-
revolution/.

12 Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2017 on payment services in the internal market.

13 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market.

14 Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

15 Directive 2008/48 of the European Union and of the Council of 23 April 2008 on credit agreements for consumers.

16 Directive 2014/17 of the European Union and of the Council of 23 April 2008 on credit agreements for consumers relating to residential immovable property.

17 FSMA introductory brochure, www.fsma.be/en/About%20FSMA.aspx, 8-19.

18 FSMA introductory brochure, www.fsma.be/en/About%20FSMA.aspx, 20.

19 Art. VII.3, §1 of the Code of Economic Law; and Annex II of the Act of 21 December 2009 on the status of payments institutions and electronic money institutions, access to the activity of payment service provider and the issuance of electronic money and the access to payments systems.

21 Recital 4 of PSD2.

22 Directorate General for Internal Policies, Basic banking service, Brussels, European Union, 2011, 8
(www.europarl.europa.eu/activities/committees/studies).

23 Memorie van Toelichting, Parl. St. Kamer, Doc 50 1370/001, 4.

24 Memorie van Toelichting, Parl. St. Kamer, Doc 50 1370/001, 4.

25 Credit agreements (1) where the credit is granted free of interest, (2) under the terms of which the credit has to be repaid within two months and (3) where the charges do not exceed €4.17 per month are excluded from the scope of application of the Credit Regulations.

26 Recital 39 PSD2.

27 Article 14, Section 3 of the Royal Decree of 16 September 2016 on the costs, percentages, duration and repayment methods of credit agreements subject to Book VII of the Code of Economic Law sets the maximum terms for zero setting.

28 www.nbb.be/en/central-credit-register/credits-individuals/mission.

29 Centrale voor kredieten aan particulieren, Statistieken, Brussel, 2016, 8.

30 Gilis, D., “Online peer-to-peer lending: op zoek naar een passend wetgevend kader”, R.B.F.-B.F.W., 2016/2, p. 161-174.

31 All intermediaries in mortgage and consumer credit must be registered with the FSMA. The register is published by the FSMA on its website and lists all registered intermediaries
(www.fsma.be/nl/Supervision/finbem/vt/cons.aspx). It appears from the register for intermediaries in consumer credit that the FSMA has withdrawn the registration of one undertaking in 2016; however, there is no further information available.

32 www.ombudsfin.be/sites/default/files/jaar-verslag-2015.pdf.