White-labelled finance puts contracts ahead of brands
Consumers need to identify the financial provider behind a retailer's brand, the European Banking Authority (EBA) says. Its factsheet sets out seven checks covering contracts, costs, complaints, cancellation, privacy and fraud.
The brand is not the provider
White labelling lets a company market financial products under its own brand while another company provides them.
Examples include grocery-branded payment cards and online checkout options to pay later or in installments.
At least two firms are involved: the distributor and the financial provider.
The EBA advises consumers to check both names in the terms and conditions and the provider's licence or registration status.
Borrowers repay the lender, not the brand owner.
Consumers also need to establish whether a payment option constitutes credit and understand their obligations.
Cost checks cover contract duration, total charges, fixed or variable interest rates and extra fees, including recurring charges.
Complaints need a clear destination
The factsheet also asks consumers to identify who handles complaints and whether the available contact channels suit them.
Ending an agreement may require notifying both the brand owner and the provider.
Privacy policies explain which companies receive personal data and how they use it, including third-party marketing.
The EBA warns about offers that seem too good to be true or pressure consumers to act quickly.
Multiple firms can also make impersonation fraud harder to detect.
Rights follow the contract
A familiar brand does not identify the company responsible for a financial product.
White labelling can widen convenient access while making responsibilities harder to trace.
The EBA ties consumers' rights and protections to the provider, contract and allocation of responsibility.