Following its request for feedback last year, the European Commission has adopted reforms of the current EU rules concerning financial services contracts concluded at a distance.
The proposal aims to simplify and modernise the legislative framework by repealing the existing Distance Marketing of Financial Services Directive while including relevant aspects of consumer rights regarding financial services contracts concluded at a distance within the scope of the Consumer Rights Directive.
The overall objective of the legislation remains unchanged: to promote the provision of financial services in the internal market while ensuring a high level of consumer protection.
The proposal includes the following changes:
- easier access to 14-day withdrawal right for distance contracts for financial services;
- clear rules on what, how and when pre-contractual information is to be provided;
- special rules to protect consumers when concluding financial services contracts online, including introducing the option to request human intervention, if the interaction with such online tools is not fully satisfactory;
- enforcement – authorities will have more powers to impose stronger penalties that will apply to financial service contracts concluded at a distance in case of widespread cross-border infringements, with a maximum penalty of at least 4% of annual turnover; and
- full harmonisation to ensure the same high level of consumer protection across the internal market, establishing similar rules for all providers across Member States.
The Council of the EU and the European Parliament will now consider the legislative proposal.