Protection of Consumers in Consumer-Credit Contracts: Expectations and Reality in Estonia

Author:Karin Sein
Position:Docent of Civil Law University of Tartu
Karin Sein
Docent of Civil Law
University of Tartu
Protection of Consumers in
Consumer-Credit Contracts:
Expectations and Reality in Estonia*1
1. Introduction
Consumer protection in credit agreements has become an increasingly acute legal and social problem dur-
ing the recent economic crisis. This crisis was at least partly rooted in the lending boom, during which credit
was extremely easily obtainable even for non-creditworthy borrowers. Since 2008, we have been experienc-
ing the sobering effects of the recession, in Estonia just as much as in other countries, and it has very often
been the consumer who faces the bitter consequences of over-indebtedness.
This article discusses the development and experiences of Estonian consumer-credit law over the
last 10 years—i.e., since the codi cation of the new Estonian law of obligations. The paper is based on the
assumption that the analysis of consumer-protection issues in consumer credit cannot be limited solely to
the provisions of substantive law: while in Estonia the contractual aspects of credit transactions are regu-
lated by the Law of Obligations Act*2 (LOA), including the norms implementing the new EU Consumer
Credit Directive*3 (CCD), the enforcement of the claims arising from consumer-credit contracts are to a
great extent set forth in or affected by other legal acts, most importantly in the General Part of the Civil Code
Act*4 (GPCCA) and the Civil Procedure Code.*5 The Consumer Protection Act*6, in turn, regulates the pub-
lic-law requirements of offering of credit services and the supervision thereof. The article shows that it is
not possible to achieve effective protection of consumers in credit relationships by substantive-law regulation
alone. On the contrary: in reality, it is very much dependent on aspects of procedural law.
1 The research leading to these results has received funding from the Norway Financial Mechanism 2009–2014 under project
contract No. EMP205.
2 Võlaõigusseadus. – RT I 2001, 81, 487; RT I, 11.6.2013, 3 (in Estonian).
3 Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers
and repealing Council Directive 87/102/EEC. – OJ L 133/66, 22.5.2008.
4 Tsiviilseadustiku üldosa seadus. – RT I 2002, 35, 216; RT I, 6.12.2010, 12 (in Estonian).
5 Tsiviilkohtumenetluse seadustik. – RT I 2002, 35, 216; RT I, 22.3.2013, 16 (in Estonian).
6 Tarbijakaitseseadus. – RT I 2004, 13, 86; RT I 2010, 77, 590 (in Estonian).

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