European UnionConsumer Credit Directive, Right to Human Intervention in an Automated Creditworthiness Assessment (Article 18(8))
Directive (EU) 2023/2225, Art. 18(8)
A data subject rights rule binding public and private bodies.
- Private right of action
- No
- Obligation class
- Data subject rights, Disclosure
As of .
What it requires
- This duty takes effect on (Article 48(1)), the date from which Member States must apply the national measures that transpose the Directive, and it does not reach a credit agreement existing on that date (Article 2(2), point (l)).
- This Directive is addressed to the Member States (Article 50), which must adopt and publish the measures necessary to comply with it by and apply them from (Article 48(1)), so a creditor or credit intermediary meets these rules through each Member State's national law.
- If your creditworthiness assessment involves the use of automated processing of personal data, give the consumer the right to request and obtain human intervention from you (Article 18(8)).
- Give the consumer the right to request and obtain from you a clear and comprehensible explanation of the assessment of creditworthiness, including on the logic and risks involved in the automated processing of personal data as well as its significance and effects on the decision (Article 18(8), point (a)).
- Give the consumer the right to express the consumer's own point of view to you (Article 18(8), point (b)).
- Give the consumer the right to request a review of the assessment of the creditworthiness and of your decision on the granting of the credit (Article 18(8), point (c)).
- Inform the consumer of the right to request and obtain human intervention (Article 18(8), second subparagraph).
Who enforces it
Enforcement body
The national competent authorities that each Member State designates under Article 41(1) as empowered to ensure the application and enforcement of the Directive, with investigating and enforcement powers and adequate resources.
What this law does
Article 18(8) provides that, where the creditworthiness assessment involves the use of automated processing of personal data, Member States shall ensure that the consumer has the right to request and obtain from the creditor human intervention.
That right consists of the right to request and obtain from the creditor a clear and comprehensible explanation of the assessment of creditworthiness, including on the logic and risks involved in the automated processing of personal data as well as its significance and effects on the decision. It consists of the right to express the consumer's own point of view to the creditor.
It also consists of the right to request a review of the assessment of the creditworthiness and the decision on the granting of the credit by the creditor. Article 18(8) also requires Member States to ensure that the consumer is informed of that right.
Article 3, point (2), defines a creditor as a natural or legal person who grants or promises to grant credit in the course of that person's trade, business or profession. Article 2(1) provides that the Directive applies to credit agreements.
Article 2(2), point (a), excludes from the Directive credit agreements secured by a mortgage, or by another comparable security commonly used in a Member State on immovable property, or secured by a right related to immovable property. Article 2(2), point (c), excludes from the Directive credit agreements involving a total amount of credit of more than EUR 100,000.
Article 2(3) applies the Directive to a credit agreement of more than EUR 100,000 that is not secured by a mortgage, by another comparable security on immovable property or by a right related to immovable property, where its purpose is the renovation of a residential immovable property.
Article 2(2), point (l), excludes from the Directive credit agreements existing on , but Articles 23 and 24, Article 25(1), second sentence, Article 25(2) and Articles 28 and 39 apply to all open-end credit agreements existing on that date.
Article 40(1) requires Member States to ensure that consumers have access to adequate, prompt and effective out-of-court dispute resolution procedures for the settlement of disputes between consumers and creditors or credit intermediaries concerning rights and obligations relating to credit agreements established under the Directive.
Article 44(1) requires Member States to lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to the Directive, and provides that the penalties must be effective, proportionate and dissuasive. Article 48(1) requires Member States to adopt and publish by the laws, regulations and administrative provisions necessary to comply with the Directive, and to apply those measures from .
When LexLint raises it
When your app profile says your app makes high-risk automated decisions or provides financial services.