Proposal for a Directive of the European Parliament and of the Council amending Directive 2011/83/EU on distance contracts for financial services and repealing Directive 2002/65/EC.
The Proposal aims to simplify and modernize the legislative framework by repealing the existing Directive 2002/65/EC on Distance Marketing of Consumer Financial Services (DMFSD) and including the relevant aspects of consumer rights in relation to distance contracts for financial services within the horizontal scope of consumer rights. The general objective of the legislation is also maintained, namely to promote the provision of financial services in the internal market while ensuring a high level of consumer protection. This objective is achieved in five different ways:
- Easier access to the 14-day right of withdrawal for distance contracts for financial services
To facilitate the exercise of this right, the operator will offer a withdrawal button when the sale is made by electronic means. In addition, the operator is obliged to send a notice of the right of withdrawal if the pre-contractual information is received less than one day before the contract is concluded. - Clear rules on the content, format and timing of pre-contractual information
Modernization of electronic communication, imposing an obligation on the seller to provide certain information in advance. The information must also appear prominently on the screen and rules are introduced on the use of pop-up windows or layered links to provide information. The new rules will also ensure that the consumer has sufficient time to understand the information received, at least one day before the actual signing. - Special rules to protect consumers when contracting financial services online
The proposal obliges operators to offer fair and transparent online systems and to provide appropriate explanations when using online tools such asrobo advisors orchat boxes. There is also the option to request human intervention if the interaction with these online tools is not entirely satisfactory. - Compliance
More severe penalties will be applied to financial services contracts concluded at a distance in case of widespread cross-border infringements, with a maximum penalty of at least 4% of annual turnover. - Full harmonization to ensure the same high level of consumer protection throughout the internal market
The proposal introduces full legal harmonization by setting similar rules for all suppliers in any Member State.
The proposed directive is structured in 5 articles followed by an annex.
- Article 1 on amendments to Directive 2011/83/EU, in addition, introduces Chapter III.a concerning rules relating to financial services contracts concluded at a distance, which encompasses:
- Information requirements for distance contracts for consumer financial services.
- Right of cancellation of remote contracts for financial services.
- Payment for the service rendered prior to withdrawal.
- Additional protection with respect to online interfaces.
- Article 2 on transposition. Member States shall adopt and publish, not later than 24 months after their adoption, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions. They shall apply those provisions from 24 months after their adoption.
- Article 3 repeals Directive 2002/65/EC with effect from 24 months after its adoption. References to the repealed Directive shall be construed as references to Directive 2011/83/EU, as amended by this Directive, and shall be read in accordance with the correlation table in the Annex to this Directive.
- Article 4 Entry into force This Directive shall enter into force on the twentieth day following that of its publication in the OJEU.
- Article 5 establishes that the addressees Directive shall be the Member States.
