Bonprix's 'Buy Now, Pay Later' Advertisement Under Fire: ECJ Weighs in on Transparency for Consumers
ECJ Insists on Transparent Disclosure to Consumers Regarding Buy Now, Pay Later Advertisements - ECJ Pushes for Transparent Details in Advertising for Consumers' Awareness
Here's the lowdown: Bonprix, a popular retailer, pushed an ad in December 2021, hyping up a 'buy now, pay later' option. The Consumer Association cried foul, claiming this sweet deal wasn't so sweet after all—users couldn't tell that this payment method came with a creditworthiness check.
The Consumer Association took their case to court, but initial rulings were against them. The case went up the ladder to the Federal Court of Justice (BGH) in Karlsruhe, which then turned to the EU Court of Justice (ECJ) for a clearer definition of the term "promotional offer" under EU law. The crux of the matter: Was Bonprix's claim considered a promotional offer? If so, they may have been required to disclose the creditworthiness check.
The ECJ didn't rule on Bonprix's specific advertisement. Instead, they laid down the law on 'buy now, pay later' advertising. The ECJ declared that mention of a specific payment method may constitute a promotional offer if it offers consumers an advantage that might sway their purchasing decision—be it financial or convenience-based. The ECJ reasoned that the ability to pay later gives customers more time, a small financial advantage, and the freedom from requesting a refund if they decide to back out. This statement, hence, can be deemed a promotional offer.
Under such an advertisement, retailers are obliged to inform consumers about the conditions for buying on credit. It's up to the BGH now to determine if Bonprix's ad falls under this category, pending the decision by the Consumer Association's appeal in Karlsruhe. A verdict date has yet to be set.
- ECJ
- Federal Court of Justice
- Consumer Association
- Creditworthiness
- Karlsruhe
- EU
- Luxembourg
- Germany
- Consumer Association Hamburg
Insights: The EU takes consumer protection laws seriously, ensuring transparency and fairness in advertising, especially for financial products. Marketing strategies should be clear, truthful, and not misleading. In the context of 'buy now, pay later' offers, the EU may scrutinize transparency, compliance with regulations, and potential misleading advertisements. Relevant EU directives, such as the Consumer Credit Directive and the Unfair Commercial Practices Directive, set out guidelines for these matters. For a comprehensive ruling on 'buy now, pay later' advertising, specific case law or a relevant judgment would be necessary.
ECJ's decision on 'buy now, pay later' advertising highlights the importance of disclosing creditworthiness checks in vocational training offers, as the ability to pay later can be considered a promotional offer. Retailers in EC countries must ensure transparency in their business practices to abide by EU consumer protection laws.
