Work is progressing in the EU Council bodies on the new proposal for a directive that will update and replace Directive 2002/65/EC on the distance selling of financial services to take account of the digitalisation of retail financial services.
The proposal, presented in May 2022, is based on full harmonisation and modernises EU rules for financial services contracts concluded at a distance - whether online or by telephone - to enhance consumer protection and promote the cross-border provision of financial services in the single market. As such, it will amend Directive 2011/83/EU on consumer rights (see EUROPE 12950/4).
A compromise proposal dated 31 January was submitted to the Member States. Viewed by EUROPE, it reflects the Swedish Presidency’s desire to strike a balance between a high level of consumer protection and legal certainty, especially for contracts concluded online, taking into account the legislation on digital products and services (DMA and DSA).
To this end, it is seeking to clarify.
Thus, the text states that the new directive should provide a safety net for financial services that are not covered by sectoral EU legislation or that are excluded from the scope of EU acts governing specific financial services.
A paragraph is added to clarify that financial services contracts concluded other than at a distance are not covered by this directive, but that Member States are free to determine, in accordance with EU law, which rules apply to such contracts, including the requirements of this new directive.
As regards the consumer’s right to pre-contractual information and the right of withdrawal, the compromise proposal clarifies that Directive 2011/83/EU does not cover financial services which are defined as banking, credit, insurance, personal pension, investment or payment services. The sale of goods such as precious metals, diamonds, wine or whisky should not be considered in itself as a financial service to which the consumer’s right to pre-contractual information and withdrawal would apply, the text states.
According to the proposed compromise, the right of withdrawal should not apply to financial services whose price depends on fluctuation in the financial market, beyond the control of the trader. Where the consumer has the right to withdraw from such contracts, the possible loss of value of the financial market instruments should be taken into account in the amount to be paid to the consumer.
For contracts concluded by electronic means, the text removes the prohibition on the trader deploying measures in their online interface which could distort or impair the ability of consumers to make a free, independent and informed decision or choice. Instead of this ban, reference is made to other EU rules aimed at ensuring fairness online that may apply, such as Regulation 2022/2065/EU.
To ensure a high level of consumer protection, the draft compromise invites the Commission to assess how the structure, design, function or mode of operation of online interfaces used by traders affect the ability of consumers to make a free, autonomous and informed decision or choice.
In this context, the Commission should look at practices such as timed transactions placed with the aim of instilling a sense of urgency in consumers to speed up the conclusion of a contract and the use of discriminatory price optimisation based on individual price sensitivity, the text says.
The Commission’s proposal provides for a withdrawal button in the case of electronic sales. The compromise proposal sets out how this would work.
View the compromise proposal: https://aeur.eu/f/58y (Original version in French by Aminata Niang)