Kreditaftaleloven (the Danish Credit Agreements Act)
Also known as danish credit agreements act, consumer credit act
Kreditaftaleloven applies where credit is granted to a consumer — and it imposes disclosure requirements before the agreement is made.
- Applies to
- Credit granted to consumers
- Requires
- Disclosure before the agreement
- Consequence
- Terms may fall away
In practice
The dividing line is who receives the credit. Selling on invoice to another business puts you outside the act. Granting a private individual time to pay in instalments can put you inside it — even without ever having thought of it as a credit agreement.
That is worth knowing, because it bites in a place many do not expect: an instalment arrangement with a consumer may, depending on the circumstances, be covered. If the disclosure requirements are not met, it can cost you the right to charge interest and costs on the arrangement — precisely what the arrangement was meant to secure.
For a creditor trading purely B2B the act is mainly a boundary marker. For one with both kinds of customer, it is a reason to keep the two tracks apart.
Where it commonly goes wrong
- Consumers are handled under the business rules the company is used to. The compensation fee is the clearest example: it applies only between businesses.
- The instalment arrangement is written without the disclosures. Against a consumer, the formal requirements can decide whether the terms are enforceable at all.