Chaired by Swedish Minister for Energy, Business and Industry Ebba Busch, the EU’s Competitiveness Council is expected to reach a general approach on the revision of the EU directive concerning financial services contracts concluded at a distance—which aims to adapt Directive 2002/65/EC, which the new directive will repeal, to the digital environment—on Thursday, 2 March.
“The text has broad support from Member States. We expect an agreement”, a senior EU official emphasised on Tuesday, 28 February.
In fact, the compromise text on this May 2022 proposal—approved by EU27 permanent representatives on 17 February—will be submitted to ministers and is expected to be the subject of statements by Luxembourg and Italy. Both of these countries welcome the proposal’s general objective but still have concerns that they hope will be addressed during negotiations with the European Parliament when it is ready (see EUROPE 13130/10).
The text, as seen by EUROPE, will actually constitute the EU Council’s position for these interinstitutional negotiations.
In general, it strengthens consumer protection through precontractual information requirements; it ensures that it is as easy for consumers to withdraw from a contract as it is for them to enter into a contract online via a withdrawal button, guarantees them the right to solicit human intervention, and clarifies how the future directive will interact with other sectoral legislation.
Level of harmonisation. While the proposal aims for full harmonisation, the compromise provides that Member States are free to determine, in accordance with EU law, which rules apply to these contracts, including the requirements set out in this new directive.
Regarding the right of withdrawal, Member States will be able to go further than the future directive.
The compromise text adds articles so that the directive will include provisions on telephone contracts, inertia selling, reporting, and the possibility for Member States to maintain and introduce language requirements in national law concerning precontractual information.
The [time limit for the] right of withdrawal is reportedly 12 months and 14 days, if the consumer has not received the contractual information in accordance with the requirements laid down by the directive, except where the consumer has not been informed about the right of withdrawal itself.
Withdrawal button. In order to not limit the application of the withdrawal button to financial services, the compromise moves the relevant provisions to the general chapter of Directive 2011/83/EU on consumer rights, thus ensuring a horizontal scope of application for contracts concluded at a distance.
Precontractual information. According to the compromise, Member States will be able to adapt the way in which adequate explanations are given according to the circumstances in which the service is offered and according to the consumer’s need for assistance.
Penalties. The text abolishes the requirement to impose fines amounting to a maximum of at least 4% of the trader’s annual turnover in the event of a serious cross-border infringement.
See the text of the general approach: https://aeur.eu/f/5jn (Original version in French by Aminata Niang)