New Draft Bill Implementing EU Consumer Credit Rules Published For Consultation

Background

The draft bill includes several amendments to both the Credit Agreements Act, the Marketing Practices Act, the Act on Consumer Loan Businesses (changed to Act on Consumer Loan Businesses and Registration of Credit Intermediaries), the Financial Business Act and the Act on Real Estate Credit Companies.

Some select amendments to the Marketing Practices Act and Credit Agreements Act, alongside a few other changes, are detailed further below.

Overview of key amendments

The draft amendments to the Marketing Practices Act contain prohibitions of certain types of marketing of credit agreements and a new mandatory warning statement when marketing credit agreements.

A new Section 11c will provide that the marketing of credit agreements must be conducted in a reasonable, clear, and non-misleading manner, thereby supplementing the existing provisions in Sections 5 and 6 on misleading marketing. Language that could lead consumers to have incorrect expectations regarding the availability, costs, or total payable amount of the credit must therefore be avoided. Contrary to the existing provisions on misleading marketing, it will not be a condition for violation of Section 11c that the marketing practice significantly affects or may affect the consumers' financial decisions.

Further, a new Section 11d will provide that marketing of credit agreements must not i) imply that obtaining credit will improve a consumer's financial situation, ii) mention that existing credit agreements or registered credit scores have little or no impact on the assessment of a credit application, iii) falsely suggest that credit can increase financial resources, serve as a substitute for savings, or enhance living standards, or iv) emphasize how easy or quick it is to obtain credit, thereby aiming to prevent that consumers impulsively obtain a credit.

The most significant amendment is likely that a new Section 18(1) provides that marketing of credit agreements must include a clear and prominent warning to make consumers aware that borrowing money costs money. The warning must be provided by using the following statement "Caution! Borrowing money costs money" (in Danish: "Advarsel! Det koster penge at låne penge") or similar wording.

Based on the draft preparatory works, this obligation extends to even interest-free and cost-free credit agreements, i.e. credit agreements that do not cost money, except in default-situations. A small opening is provided in the preparatory works, allowing the trader to elaborate in the marketing that the specific credit agreement does not cost money, unless the consumer defaults and thereby becomes liable to pay reminder fees or interest for late payment. The appropriateness of this solution can be discussed, as it may become somewhat misleading to inform consumers that the credit agreement costs money (i.e. not "may" cost money), when it is in fact cost-free except in cases of default.

The draft amendments also include an expansion of the provisions stipulating how standard information, including the representative example, must be provided to consumers, e.g. by requiring that the information is adapted to fit the media on which it is presented.

Proposed amendments to the Credit Agreements Act (Kreditaftaleloven)

A key amendment to Section 3(1)(1) narrows the exemption for buy-now-pay-later (BNPL) arrangements. Going forward, such arrangements will only fall outside the Act if (i) no third party provides credit, (ii) repayment is entirely interest- and cost-free (except for late payment fees permitted under the Danish Interest Act), and (iii) payment is made within 50 days of delivery (currently 90 days). As a result, a larger share of the BNPL market will become subject to the Act.

Beyond BNPL, the proposed amendments affect the entire lifecycle of consumer credit agreements and will require creditors to revise both processes and documentation.

At the pre-contractual stage, the draft bill proposes an expansion of several of the information requirements towards consumers (changes to Sections 7a–7b and recasts of Exhibits 2–3). The amendments introduce more detailed and standardised information forms to ensure that consumers can effectively compare offers and make informed decisions. A new provision also imposes an ongoing obligation on creditors to make general information about credit agreements available at all times, free of charge and in clear and comprehensible language (Section 7e).

All required information must in the future be provided on a durable medium chosen by the consumer. At this stage, it remains unclear whether the addition that the consumer has the right to choose the durable medium entails a complete freedom of choice between all possible durable media, including whether creditors and credit intermediaries may be obliged to send physical letters where the consumer chooses this medium, even if the consumer is not otherwise exempt from Digital Post. However, it should be noted that consumers cannot require creditors and credit intermediaries to provide information on types of durable media that are not commonly used.

In addition, the draft bill tightens the requirements for creditworthiness assessments (changes to Section 7c), including the basis for the assessment and verification of information collected for the assessment. The amendments also explicitly include that the creditworthiness assessments must be carried out in the consumer's interest, i.e. not in the credit provider's interest. In addition, creditors must be able to document and retain the basis for their creditworthiness assessments for a defined period.

The draft bill also introduces a new provision in Section 13 on obtaining the consumer's consent to a credit agreement. Creditors and credit intermediaries will not be permitted to use pre-ticked boxes or other default settings, and the consent must reflect an active, voluntary, specific, informed and unambiguous expression of intent. Moreover, the draft bill introduces a new provision in Section 15 that prohibits creditors from granting credit without the consumer's explicit prior request and consent. As a result, unsolicited credit, the unilateral introduction of a new overdraft facility or the unilateral increase of a consumer's credit limit will be prohibited.

At the contractual stage, the draft bill proposes an expansion of the requirements for the content of credit agreements and the information they must contain (changes to Section 8). After the conclusion of a credit agreement, the draft bill also provides that the consumer must be informed of any change to the debtor interest rate in good time (changes to Section 9), although not specifying a specific time frame. For credit agreements involving an overdraft facility, the creditor must also keep the consumer informed by providing an account statement at least once a month (changes to Section 10).

Other new measures include a new Section 4b codifying the prohibition against discrimination unless objectively justified, and a new Section 4c introducing an obligation to act in accordance with good business practice when granting consumer credit. The draft bill also introduces new rules in Section 12 on offering credit agreements through tying and bundling, as well as an obligation in Section 29b for creditors to implement procedures for the early identification of consumers in financial difficulty, including referral of such consumers to debt counselling services.

Amendments to the Act on Consumer Loan Businesses (lov om forbrugslånsvirksomheder)

The draft bill introduces a new registration requirement for credit intermediaries in the Act on Consumer Loan Businesses, providing that credit intermediaries must register with the Danish Financial Supervisory Authority ("FSA") before commencing operations. The FSA will be obliged to refuse registration under certain circumstances.

The FSA can process applications from 20 May 2026, and any credit intermediaries currently operating can continue their activities without registration until the FSA decide upon the application, provided they submit their registration application by 20 November 2026.

Further, it is proposed to introduce knowledge and competence requirements for employees of consumer loan businesses and credit intermediaries. In addition to competence requirements for employees, members of management must - as part of the proposed registration regime for credit intermediaries - meet fit-and-proper requirements concerning integrity and professional qualifications.

New regulation on the remuneration of employees of both credit intermediaries offering advisory services and consumer loan businesses is also proposed. As an example, the remuneration structure must not compromise employees' ability to act in the consumer's best interest and must not be dependent on meeting sales targets. Moreover, a new Section 9b introduces a requirement that consumer loan businesses must establish a remuneration policy for employees responsible for assessing creditworthiness.

Consultation deadline and expected effective date

The draft bill was published for consultation on 13 August 2025 with a deadline for responses on 10 September 2025.

The proposed changes are scheduled to take effect on 20 November 2026. However, certain provisions will also apply to open-ended contracts entered into before this date. Businesses with such agreements should review them in due time to ensure compliance once the new rules apply.