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The scope of the Regulation comprises of all kinds of consumer
loan agreements concluded between lenders and consumers, as well as
credit card agreements that grant the option to postpone payment for
more than three months, or similiar payment methods, in return for
interest or similiar benefits.
On the other hand, the Regulation does not apply to housing
finance agreements and overdraft account agreements in which the
loan is paid back in thirty days, and non-cash loan agreements, such as
cheques and letters of guarantee.
Material Provisions
The Second Part of the Regulation concerns Prior Information
Obligations. Accordingly, it is mandatory that the prior information
forms are prepared in at least twelve fonts, using an understandable
language, clear, simple and legible, and are provided to the consumer
either in hard copy, or in a permanent data form. Furthermore, in agree-
ments for definite or indefinite periods, lenders or (if any) loan agents,
are obliged to inform the consumer in detail about the terms of the
agreement within a reasonable time prior to the conclusion of loan
agreements with definite periods. For example, this information shall
specifically include the type of the loan, the address, and communica-
tion information of thes lender and their agents, if any, the period of the
loan agreements, the total amounts of the loans, and the fees to be
charged from the consumers, the interest rates, the detailed payment
plans, whether the parties will assume costs that arise, the legal conse-
quences of defaults, the rights of withdrawal, the early payments, and
other issues set forth under the Regulation.
The Third Party regulates the Form and the Mandatory Content of
the Agreements. In accordance with Art. 10 of the Regulation, except
for distance agreements, consumer loan agreements shall not be valid
unless concluded in writing. Lenders who do not conclude a valid
agreement shall not claim the invalidity of the agreements afterwards,
to the detriment of the consumer. Moreover, it is mandatory that con-
sumer loan agreements be prepared in at least twelve fonts, using
understandable language, clear, simple and legible, and a copy be given
to the consumer, either in hard copy, or in permanent data storage form.
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