CONSUMER'S STATUS IN CROWD AND PEER TO PEER FINANCE
Taking into account the decrease in nominal yields of traditional savings products, consumers are increasingly attracted to alternative ways of investing, such as those offered by crowdfunding platforms. As control over the traditional financial sector has been strengthened after the crisis, new f...
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| Format: | Article |
| Language: | English |
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Nicolae Titulescu University Publishing House
2019-05-01
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| Series: | Challenges of the Knowledge Society |
| Subjects: | |
| Online Access: | http://cks.univnt.ro/download/cks_2019_articles%252F2_private_law%252FCKS_2019_private_law_006.pdf |
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| Summary: | Taking into account the decrease in nominal yields of traditional savings products, consumers are increasingly attracted to alternative ways of investing, such as those offered by crowdfunding platforms. As control over the traditional financial sector has been strengthened after the crisis, new forms of financial intermediation have emerged, such as crowdfunding or peer-to-peer loans. Simple individuals and regular institutions use these types of platforms to lend money directly to consumers or businesses in order to make a financial return from interest payments and the repayment of capital over time. Such services are usually provided by new market operators known to intensively digitize their processes, including technology support for credit analysis and payments settlement. From the perspective of consumer protection, these are risky tools where protection is particularly necessary. It is likely that consumers will not understand the risks involved in the transaction, especially the value of the investment, and an additional problem is the reliability of the trading platforms. Existing EU legislation does not harmonize consumer protection standards in the crowdfunding field and leaves the full development of Member States. It is also a matter of applying a mix of regulations of public and private law to achieve the desired results. Applying the rules of private law on consumer credit by their consumers is another problem. Consumers are often unaware of the legal complications involved. The purpose of this study is to show how, in the absence of harmonization of private-law measures for breaches of the national rules transposing the Consumer Credit Directive and due to the insufficient regulation of crowdfunding, the traditional division of public law (especially financial supervision) and private law (in particular contract law and consumer protection) at national level may create obstacles for consumers to rely on consumer protection standards in private actions against financial institutions. |
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| ISSN: | 2068-7796 |