Bein' Upfront: The No-BS Guide to Transparent 'Buy Now, Pay Later' Advertising
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Consumers Require Transparent Details: EU Court Insists on Clear Advertising Disclosures about 'Pay on Receipt' Plans - EU's top court urges transparent consumer data when advertising account services
Back in December 2021, the fashion retailer Bonprix promoted a snazzy 'buy now, pay later' (BNPL) option — but things didn't go according to plan. The Consumer Center noticed that customers couldn't tell if this payment method required a credit check. They argued Bonprix was being sneaky, and took the brand to court to stop the false advertising. But at first, they hit a brick wall.
The case ended up in the Federal Court of Justice (BGH) in Karlsruhe, Germany. The BGH paused the proceedings and asked the European Court of Justice (ECJ) for clarification on the definition of a "sales promotion offer" under EU law. The verdict? If a payment method gives consumers an advantage influencing their purchase, it counts as a promotion offer. Simple as that.
The ECJ's ruling also states that BNPL providers must openly share conditions for buying on account. That means disclosing the finer details like creditworthiness requirements. The ECJ sees the 'pay later' advantage as a tiny financial perk and a potential incentive to choose a specific provider.
The ECJ's judgement is not about Bonprix specifically, but it sets a precedent. It's up to the BGH to decide whether Bonprix was being shady and rule on the Consumer Center's appeal. As of now, there's no date set for a decision in Karlsruhe.
- ECJ
- Federal Court of Justice
- Consumer Center
- Creditworthiness
- Karlsruhe
- EU
- Luxembourg
- Germany
- Consumer Center Hamburg
- The revision of the Consumer Credit Directive (CCD2) will mandate stricter regulation of BNPL products across the EU, encompassing non-mortgage credit up to €100,000.
- member states in the EU must comply with the new CCD2 regulations on BNPL offers, including clear, upfront disclosure of credit terms, fees, and risks, with exemptions not applying to offers over €200 by late 2026.
