New Consumer Law And Consumer Credit Provisions In 2026 - Key Amendments And Practical Implications

June 2026 – Austria has enacted the Consumer Law Amendment Act (Verbraucherrechts-Änderungsgesetz 2026, VerbRÄG 2026, not yet published in the Federal Law Gazette) and the Consumer Credit Law Amendment Act 2026 (Verbraucherkreditrechts-Änderungsgesetz 2026, VerKRÄG 2026, BGBl I Nr. 36/2026), introducing significant changes to consumer rights in distance contracts and to retail lending practices. These changes aim to strengthen consumer protection and address the rise of digital lending and embedded finance models.

Background of the reform

The primary aim of the reform is to implement Directive (EU) 2023/2225 on consumer credit agreements and Directive (EU) 2023/2673 on financial services contracts concluded at a distance. The previous consumer credit directive proved only partly effective in ensuring a high level of consumer protection, particularly in light of rapid technological change and evolving consumer behaviour. This prompted the European Commission to introduce amendments.

To strengthen consumer trust in distance selling, Directive (EU) 2023/2673 enhances protection for financial services contracts concluded at a distance. Given that such contracts are typically concluded electronically, the new rules focus on ensuring transparency and fairness in online transactions.

Key amendments to consumer credit provisions

The Consumer Credit Law Amendment Act implements Directive 2023/2225 by repealing the existing Consumer Credit Act (Verbraucherkreditgesetz) and by enacting a new Consumer Credit Act 2026 (VKrG 2026).

The VKrG 2026 brings an extended scope of application: all forms of payment deferrals and financial assistance are covered, as well as interest- and cost-free loans and payment deferrals and small loans; the previous de minimis threshold of EUR 200 has been eliminated. Through this extended scope, the legislation in particular targets “Buy Now Pay Later” (BNPL) and instalment purchase business models.

However, typical payment deferrals granted by suppliers of goods or services providers are exempt from the VKr2026 if certain conditions are met. The same applies to common credit card payments that allow consumers to delay payment processing, as the legislation exercised the option to exempt “debit cards with deferred payment”.

Increased information obligations and pre-contractual information

Advertising for loan agreements will be required to include a mandatory warning that taking out a loan involves costs (Section 8 of the VKrG 2026).

A new general information requirement (Section 9 of the VKrG 2026) obligates lenders to provide clear and understandable general information about loan agreements at all times. This general information obligation includes, among others, information about the lender, the purposes for which the loan may be used, and the possible term of the loan agreement. This is irrespective of the pre-contractual information obligations stipulated in Section 10 of the VKrG 2026 that consumers must receive. These have been expanded and must now be provided in a form specified in Annex I of the VKrG 2026. All information must be provided to the consumer free of charge (regardless of the medium used for its provision).

There is also a new reminder obligation in Section 9 paragraph 7 of the VKrG 2026: if pre-contractual information is provided at short notice (less than one day before the conclusion of the contract), the lender must remind the consumer of the right to withdrawal within one to seven days after the conclusion of the contract.

Increased creditworthiness check

Section 17 of thje VKrG 2026 increases the requirements for assessing the creditworthiness of consumers. Instead of the previous warning obligation, lenders may now only make credit available if the creditworthiness check indicates that it is likely that the consumer will fulfil the obligations under the credit agreement in the agreed manner. If the consumer is not considered creditworthy, the loan may not be granted.

Another new provision concerns the use of artificial intelligence. Where the creditworthiness assessment involves the use of automated processing of personal data, the consumer has the right to request and obtain from the lender a clear and comprehensible explanation of the assessment, including the logic and risks involved in the automated processing.

Arrears and forbearance measures

Section 31 of the VKrG 2026 requires lenders to exercise reasonable leniency that consider the consumer’s individual circumstances before initiating enforcement proceedings. These forbearance measures may include (among other possibilities) a total or partial refinancing of a credit agreement or a change to the contractual terms, e.g., extension of the term, deferral of payment, or reduction of the interest rate. Lenders must further refer consumers who experience difficulties in meeting their financial commitment to debt advisory services.

Key amendments to consumer rights and distance contracts

The current Austrian Distance Financial Services Act (Fern-Finanzdienstleistungs-Gesetz, FernFinG) will be repealed and included in the Austrian Distance and Off-Premises Sales Act (Fern- und Auswärtsgeschäfte-Gesetz, FAGG). Therefore, the FAGG will now also cover financial services concluded at a distance between a business and a consumer. To this end, a separate section, Section 18a, will be created within the FAGG.

“Cancel button” for withdrawals

For all distance contracts concluded by means of an online interface, the business partner shall ensure according to Section 13a of the FAGG that the consumer can also withdraw from the contract by using a withdrawal function (so-called “cancel button”). The withdrawal function shall enable the consumer to send an online withdrawal statement informing the business partner of his or her decision to withdraw from the contract. The business partner must acknowledge receipt immediately. The function shall be prominently displayed on the online interface and be available throughout the entire cancellation period.

Precontractual information obligations, adequate explanations, and withdrawal from financial services

Precontractual information obligations have been modernised and future-proofed, including requirements that go beyond the existing obligations (Section 18a of the FAGG).

As a new requirement, business partners must provide consumers with adequate explanations (including but not limited to the precontractual information) regarding the financial service contracts offered. This must be free of charge and made prior to the conclusion of the contract. The intention is that the consumer can assess whether the contract and any services offered meet his or her need and financial situation.

When using online tools such as chatbots or robo-advisors, consumers can request and obtain human intervention during the pre-contractual phase, and, in justified cases, also after the conclusion of the distance contract.

Further, there is no longer a “perpetual” right of withdrawal right if the consumer has not received the contract terms and pre-contractual information; instead, the withdrawal period ends at least twelve months and 14 days after the conclusion of the distance contract, unless the consumer was not informed about their right of withdrawal (Section 18b paragraph 2 of the FAGG).

Timeline and outlook

The new consumer credit rules of the VKrG 2026 will enter into force on 20 November 2026. The law makes it clear that they will only apply to credit agreements and credits entered into or granted after 19 November 2026. However, certain provisions concerning termination rights, information obligations, and forbearances also apply to credit agreements that have been concluded for an indefinite period before 20 November 2026 and that still exist on this date.

The essential requirements of the new FAGG were meant to apply from 19 June 2026; however, the law has not yet been formally passed, so it is currently unclear from which date the new rules will apply. In any case, they will only apply to contracts concluded after the effective date. 

The new rules also introduce a range of additional obligations for retail lenders and other businesses engaged in distance selling. As a result, organisations will need to significantly adapt their documentation, internal processes, and digital distribution channels to meet these new requirements. There is also increased need for adjustments in sales and product design.

We would be pleased to support you in reviewing your current frameworks, identifying potential gaps, and implementing the necessary changes to ensure ongoing compliance.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.