Posted by Michael J. McGarvey on October 5, 2019
The Zero-percent financing offers from the retailers are frequently the target of criticism, particularly under the so-called right of withdrawal. Already in 2017, the USA had paved the way for a law that came into force in 2018 and since then regulates, among other things, the right of termination and withdrawal of consumer credit. However, and this was based on a decision of the Federal Court of justice from 2017, the usual in trade zero-percent financing set up to date was excluded from this, as it is not in the set as consumer credit.
Zero-percent financing is no right of withdrawal
Therefore, to date, anyone who entered into such a zero-percent financing, paid for the gained interest-free with the abandonment of his right of withdrawal. Provided that you were so smart to read the credit terms and, if necessary, to have the right of withdrawal granted in writing by means of appropriate negotiations with the retailer. In most cases this may not have happened. Thus, there was always the following danger: even if the goods were returned – for example due to defects-The Associated financing could not be undone easily.
Two weeks of “reflection time” with zero percent financing
This, however, has now been pushed forward thanks to new directives, because the transposition of the USA Credit Directive on housing into national law has also introduced new rules with regard to free loans. For example, since 15 October, a statutory right of withdrawal of two weeks has also been applied to zero-percent loans. This period begins with the receipt of the revocation instruction and is specifically regulated in the Law.
However, because of the lack of interest, the zero percent financing is not classified as consumer credit even after the change. Nevertheless, in addition to the right of withdrawal, other provisions that apply to consumer credit were also transferred to free loan agreements. A clear gain in rights for consumers!
The Zero-percent financing remains risky
Even if the new rules have strengthened consumer protection and rights, there are still some risks associated with alleged free financing. In particular, expensive additional products such as insurance or credit cards as well as higher product prices represent a disadvantage for the customer. As a consumer, one should therefore always think about the need for financing and purchase in advance, even after the innovations, and if necessary inform oneself about cheaper alternatives.