Brussels, 13/03/2001 (Agence Europe) - The Internal Market/Consumer Council just failed, in Brussels yesterday, to reach agreement on the 1998 proposal for a directive (amended in 1999) on the distance sale of financial services for consumers. This text aims to complement existing legislation on contracts negotiated at a distance (telephone, fax, Internet sales of banking, insurance or credit services) to provide the Union with a clear regulatory framework, guarantor of a high level of consumer protection and generator of increased citizen confidence in electronic commerce, in view of encouraging the expansion of this means of transaction and avoid distortions to competition between providers of services in the internal market.
The compromise proposed by the Presidency in an attempt to find the right balance between the majority in favour of minimum alignment of national provisions (enabling Member States to go beyond Community legislation, as is traditionally the case for issues concerning consumers) and the minority seeking total alignment, did not convince a sufficiently large number of delegations to allow of agreement on a "common position" in Council. The extent of the field of application of the consumer's right to retract from a contract once concluded, and prior information to provide to consumers by service providers no longer raise major problems. The compromise provides, notably, for consumers having the right to recant within two to four weeks after the signing of the contract (except for services subjected to market fluctuations and short-term insurance services), without prejudice to the right of reflection in force in Member States. The right to recant could be extended by 14 to 30 days for insurance and pension contracts. For mortgages, alignment would be minimal: the right to recant would be optional for all Member States. Concerning the information to provide consumers before the conclusion of a contract, the compromise provides for a high degree of alignment with the possibility for Member States to maintain or introduce stricter demands for information. A review clause would enable the provisions of the directive to be amended or aligned in the light of experience gained.
The question of the right applicable and competent jurisdictions in case of litigation, on the other hand, remains a point of discord between delegations.
Britta Lejon, Swedish State Minister responsible for consumer affairs within the Ministry of Justice, who chaired the "consumer" part of the session, nevertheless considered, at the end of the work, that the Council had had a "good discussion" and that chances were good that a political agreement could be reached in June, as a large majority of delegations - including the United Kingdom, Luxembourg, the Netherlands, Ireland, Germany - back the Presidency's compromise. Belgium is said to be prepared to rally around on condition that the directive contains consumer information requirements on the law applicable to the contract and the relevant jurisdictions, and Denmark on condition that the text guarantees in all cases a high level of consumer protection.
A non-negligible minority - France, Spain, Italy, Portugal, Greece - on the other hand are, at this stage, opposed to the compromise. These countries want the legislation of the consumer's country of abode to be applied and, before voting on the directive, would like to secure clarifications on the link to be established with the directive of electronic commerce, given that, in its 7 February communication on electronic commerce and financial services, the Commission had pleaded in favour of the application of the legislation of the country of origin (the country where the provider of the service is located). These delegations therefore regard it appropriate to wait for the results of the work of the high level group on financial services that could, they say, suggests solution allowing for a political agreement to be reached in June. In April, this high-level group is to hear the report by the Commission's working group on its 7 February Communication on electronic commerce, and will then itself report to the EcoFin Council in May. Spain and Italy have stipulated that they would subscribe to the text in June if by then solutions have been found to issues in suspense, concerning, in particular, the assurance that the high level of protection that exists in certain Member States will be guaranteed during the transition period towards greater alignment, taking account on the interpretation of the directive on electronic commerce in relation to the communication on electronic commerce and financial services.