The Article deals with the protection of consumer borrowers and lending investors in peer-to-peer lending within the legal framework provided by EU credit laws. This is the legal framework for EU Member States in the area of loans to consumers. In particular, the article analyses the business model of taking lending decisions on financial technologies (“Fintech”) and big data vis-à-vis the legal obligation of the creditworthiness assessment by lenders. At the same time, it extends the applicability of such a business model to the credit-risk analysis undertaken in the interest of lenders. Ultimately, it questions to what extent EU law caters for peer-to-peer lending, and and to what extent consumers and lenders can find protection. It hints that peer-to-peer lending presents risks for both consumers and lenders, falling short of legal obligations and established practices for their protection.
There is much hype about the potential for technological innovation (FinTech) and big data to transform and deliver financial services to consumers. The aim of this paper is to analyse, from the perspective of financial inclusion and consumer protection, the extent to which the current European Union legal framework is prepared to respond to the challenges posed by such innovation in the context of the prospective opportunities and detriment for consumers. Departing from an assessment of the already problematic and jeopardised uses of traditional credit data in the Member States, it concludes that the risks are likely to contrast or outweigh the benefits, but the legal framework does not seem fit for purpose despite the enactment of brand new legislation.
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