On July 7, 2025, a draft of a new Consumer Credit Act, aimed at implementing directives of the European Parliament and the Council, was published on the website of the Government Legislation Centre. The draft introduces several changes to the existing regulations, including those concerning the content of consumer credit advertisements.

Mandatory warnings in advertising

Under Article 8 of the draft, creditors and credit intermediaries are required to ensure that consumer credit advertising includes a clear and prominent warning indicating that certain costs are associated with the loan. To this end, the legislator proposes using the phrase “Warning! Borrowing money costs” or another equivalent message.

At the same time, the draft provides for a ban on advertising consumer credit that suggests that taking out a credit will improve the consumer’s financial situation (Article 13 Point 1 of the draft), as well as advertising that indicates that a credit leads to an increase in economic resources, constitutes a form of saving or may improve the consumer’s standard of living (Article 13 Point 3 of the draft).

Towards increasing paternalism?

The provisions mentioned above are consistent with the general trend of expanding the scope of consumer protection, often at the expense of entrepreneurial freedom and contractual autonomy. However, questions about the purpose and effectiveness of the proposed solutions seem justified, as they may be perceived as a manifestation of excessive regulatory paternalism, leading to the infantilization of consumers.

It is important to remember that, under civil law, a consumer is generally a person who has full legal capacity and, by default, enough emotional, intellectual, and social maturity to understand the consequences of their contracts – including that taking out credit involves costs and does not necessarily improve their financial situation.

Of course, legal capacity can also be available to individuals who lack the necessary decision-making powers. Still, the legislator has established protective measures in this area, including through the provisions of the Civil Code concerning defects in declarations of will. In this context, the requirement to disclose obvious facts, such as the existence of loan costs, does not seem particularly axiologically justified.

New information obligations and the model of a diligent consumer

Another aspect of the proposed regulations is also worth considering. The introduction of mandatory, standardized warnings (such as “Warning! Borrowing money costs”) could, in practice, lead to a decrease in the expected level of consumer independence and attentiveness, shifting the focus of responsibility almost entirely to the creditor. Such a regulatory measure could, in the long run, alter the standard used to assess the rationality and prudence of consumer actions, a standard that already seems to be too high.

If even the most obvious information—such as the fact that a loan is subject to payment—must be formally communicated “top-down” in every advertisement, it is hard to expect the court to assume that the consumer is required to independently analyze the more complex elements of the offer (e.g., the effects of excessive debt or the structure of variable interest rates). This could lead to increased formalism in case law and a further weakening of the principle of pacta sunt servanda, especially in disputes over the validity or effects of credit agreements.

Duplication of information obligations

It should be emphasized that the obligation to inform consumers about the costs of credit is nothing new – the proposed regulation (Article 9 Section 1 Point 4) provides for the obligation to indicate the actual annual percentage rate (APR), similarly to the current Consumer Credit Act of May 12, 2011 (Article 7 Section 1 Point 3 of the Consumer Credit Act ). Furthermore, the APR must be presented in the form of a representative example (Article 10 Section 1 of the draft), which further highlights the cost of credit at the advertising level.

As a result, in consumer loan advertising, consumers are most often informed of the loan costs at least twice: once through a warning message from Article 8 of the draft, and again by providing a specific APR. This repetition can not only cause information overload but also diminish the warning’s impact, making it seem like a mere ritual that consumers tend to ignore.

Economic effects of regulation

From a practical perspective, it’s important to note that any extra information requirements—especially those related to the content and format of advertising—incur costs. Creating a message that meets the new standards, implementing it, and adjusting marketing materials to include the mandatory warning are genuine financial burdens.

Advertising costs are part of the overall costs of running a business. They are generally passed on to the consumer. In this case, they could therefore lead to an increase in the price of the loans themselves, which would be a paradoxical effect of regulations intended to protect the economic interests of borrowers.

Credit Like Cigarettes? Warning Symbolism

The content of the proposed regulations—especially Article 8—reminds me of the mixed health warnings used on tobacco product packaging. In both cases, we’re dealing with a mandatory warning narrative that is more about discouraging the product than truly informing, aiming to weaken its appeal and prevent impulsive or marketing-driven consumer decisions.

In this perspective, EU legislators – and national legislators alike – treat consumer credit as a socially risky product, almost analogous to alcohol, cigarettes, or gambling. The aim of the regulation is therefore not solely to “increase the level of protection of consumer interests” by ensuring transparency of information, but also, it seems, to influence consumer behavior through a deterrent effect.

Summary and conclusion

While accepting the need for specific regulation of the consumer credit market, it appears justified to argue that the legislator should avoid overly paternalistic regulations which, instead of truly educating, simplify reality and diminish consumer autonomy, thereby seemingly undermining the seriousness of the law.

The actual purpose of the proposed regulation might also differ from its stated goal. It’s hard to believe that these regulations will significantly improve consumer credit awareness, as many simply duplicate existing disclosure rules and assume that consumers lack basic economic understanding.