The Lowdown on "Buy Now, Pay Later": European Court of Justice Calls for Transparent Advertising
Mandate for Transparent Advertising: ECJ Insists on Detailed Details for Shoppers when Purchasing on Credit - EU Court Requires Transparent Data for Consumers in Advertising Accounts
Ready to snag a new outfit but short on cash? Fear not, because "Buy Now, Pay Later" (BNPL) options have been popping up everywhere. However, a recent case involving Bonprix, a popular fashion retailer, has the European Court of Justice (ECJ) shaking things up.
Back in December 2021, Bonprix ran an ad promoting BNPL. While the rap on this payment method sounded too good to be true, the Consumer Center slammed it as misleading. Buyers couldn't figure out that a credit check was a prerequisite for this apparently easy payment plan. Bonprix argued its case in court to keep promoting its BNPL option, but the Consumer Center's appeal wasn't showing signs of cracking without the ECJ's help.
The case escalated to the Federal Court of Justice (BGH) in Karlsruhe, which had some serious questions. It asked the ECJ for guidance on what constitutes a "sales promotion offer" under European Union (EU) law regarding BNPL. If Bonprix's statement indeed qualified as such, it would have had to make clear that creditworthiness checks were a must.
The ECJ didn't pass judgment on Bonprix's specific ad, but did offer some insight. Turns out, mentioning a specific payment method such as BNPL is considered a sales promotion offer if it offers an advantage that can sway customers’ purchasing decisions. Whether that advantage is financial or just extra-convenient isn't the point. Providing the option to pay later is a small financial advantage, and if customers change their minds after the purchase, they won't even need to ask for a refund, since they can withdraw from the contract.
Now that the ECJ has officially classified BNPL promotions as sales promotion offers, traders must be transparent and spell out the conditions for paying later. But will this ruling apply to Bonprix? That call is now in the BGH's court.
While the BGH mulls over this case, keep your eyes peeled for updates out of Karlsruhe. The Consumer Center Hamburg has kept us informed all along, and you can expect them to keep us in the loop as this case unfolds. And as always, remember to read the fine print before you whip out your wallet!
- Keywords: BNPL, Bonprix, European Court of Justice, Federal Court of Justice, Consumer Center, Creditworthiness, Karlsruhe, EU, Germany
Additional Insights:- The European Commission has been focusing on Data Privacy and Personalized Advertising in relation to the Digital Markets Act, but no specific rulings addressing the classification of advertising statements referencing payment methods like BNPL have been made yet.- The ECJ has weighed in on other areas of EU law, including Malta's Citizenship by Investment program and antitrust fines in various sectors, but none of these decisions or enforcement mechanisms provide direct insights into the BNPL advertising classification issue.- For a comprehensive understanding of the legal classification of advertising mentioning payment options like BNPL under EU law, it's important to consult the latest case law databases or legal commentaries specifically on payment method advertising under EU consumer law or financial regulations.
In light of the ECJ's ruling, vendors offering Buy Now, Pay Later (BNPL) options in European Union (EU) countries should clearly disclose the conditions for this payment method to potential customers, incorporating details about any required creditworthiness checks. Vendors must provide transparency to consumers, ensuring that BNPL promotions are not misleading and that the financial implications of the payment scheme are fully understood.
