Editorial

Abstract

On 7–8 July 2022 a group of lawyers gathered in Galway, Ireland, for a roundtable discussion supported by the University of Galway on the Impact of Technology on Consumer Credit and Financial Services. As the title suggests, the matters that were upmost in their mind were the impact of technology on those sectors. The EU Proposal to amend the Directive on Consumer Credits (COM(2021) 347 final) figured large in the discussion from European participants. There were also Australian lawyers round the table. This special issue includes some of the papers presented at that roundtable. The Consumer Credit Directive is still awaiting adoption. Olha Cherednychencko in her paper ‘The proposal for a new EU Consumer Credit Directive: towards responsible lending in the digital age?’ provides a broad overview of how the reformed Consumer Credit Directive will assist promomoting responsible lending. Her assessment is generally favourable, subject to there being effective enforcement. Peter Rott, in ‘Small credits through online platforms’, focuses on small credits, many of which had been excluded under the 2008 Consumer Credit Directive because of the 200 euro threshold. He notes that the reform will enhance protective measures and that national laws can already provide some protection, but this vulnerable group of consumers may need the support of effective collective action mechanisms. Crowdfunding is a novel means of providing credit and yet provision to consumers is excluded from the current EU Crowdfunding Regulation. Karin Sein analyses in ‘Crowdfunding credit services under the new proposal for a directive on consumer credits’ the extent to which the proposed new Consumer Credit Directive will regulate crowdfunding and comments on the justifications for the selective application of measures. She notes that the non-discrimination principle might be problematic if it required loans be made across borders, but is pleased this will most likely not be included in the final Directive. Gerald Spindler uses his paper on ‘Algorithms, credit scoring, and the new proposal of the EU for an AI-Act’ to explore how various EU laws regulate the practice of using algorithms in credit scoring. Whilst these new techniques offer ways to enhance credit scoring they carry with them risks for consumers. Whereas the AI Act will be the main source of substantive regulation other laws will also apply, such as the proposed revised Consumer Credit Directive. A key issue will be the extent to which the trade secrets inherent within the choice of algorithm will be unlocked. Two papers deal with robo-advisers. Reinhard Steennot in ‘Robo advisory services and investor protection’ notes the advantages they might offer to new and young investors who otherwise might have no assistance. However, the assistance they offer should be explained so as the help they can provide is not overstated and they should take steps to be able to provide suitable advice. If unsuitable advice is given them compensation should be possible without having to proof the algorithm is flawed. Jeannie Paterson in ‘Making robo-advisers careful? Duties of care in providing automated financial advice to consumers’ comments that the duties should not only cover the familiar risks from human advice, but also those linked to using technology. The additional risks include automated interactions and the use of opaque and possibly biased data driven models. Ian Paterson reflects on ‘Technology and