Online users expressing concerns over loaning practices in digital platforms

In a move that could potentially reduce unnecessary bureaucratic hurdles, the Justice Ministry is proposing a legal change as part of the implementation of the EU Consumer Protection Directive into national law. This proposed change would allow the text form to be sufficient for the conclusion of general consumer credit agreements and other financing assistance, meaning signatures would no longer be required.

However, this proposal has met with opposition from various quarters, including the vzbv (German Federal Association for the Consumer Financial Protection) and the Federal Association of Consumer Centers. Ramona Pop, the President of vzbv, has expressed concerns that the ease of obtaining a loan with only a box to tick could benefit fraudsters.

The vzbv's concerns are not unfounded. In the first half of last year, there were 273 cases where people complained about irregularities in online loans. This number has increased significantly in the first half of this year, with 476 complaints reported. These cases have led many consumers to seek advice from consumer centers due to the irregularities they encountered in online loans.

The fraudulent activities reported include taking out loans in victims' names without their knowledge or explicit consent, as well as encounters with employees of fraudulent trading platforms or supposed financial service providers who attempted to conduct video identification procedures. In one case, a consumer reported a case of a supposed bank contacting them via WhatsApp, claiming costs for a 20,000 euro loan and then breaking off contact after receiving 1,300 euros in payments.

The fraudsters used various methods to deceive consumers, such as WhatsApp messages and video identification procedures. Instead of confirming accounts or paying out promised profits, these fraudsters took out loans in the victims' names or opened accounts over which they had no control.

The number of complaints about consumer loans in total in the first half of this year was more than a quarter (nearly 26 percent) higher than in the same period last year. The vzbv sees these numbers as an argument against the proposed legal change.

The Federal Association of Consumer Centers also opposes the removal of the signature requirement for concluding credit agreements. They argue that this could lead to a rise in fraudulent activities related to online loans.

Despite the increase in complaints, no specific banks or financial service providers have been identified as most frequently involved in fraud or manipulation incidents related to online loans in the first half of 2025. However, the increase in complaints about online loan fraud has prompted calls for better consumer protection and stricter requirements such as maintaining signature obligations for loan contracts.

As the digital landscape continues to evolve, it is crucial that consumer protection measures keep pace. The rise in online loan fraud underscores the need for stricter regulations to protect consumers and ensure that they are not unduly disadvantaged by fraudulent activities.