The European Union yesterday (Sep 27) forged a political agreement on common rules for selling contracts for investment funds, pension plans and credit cards, amongst others, to consumers by phone, fax or internet.
At the meeting in Brussels , the EC Internal market, Tourism and Consumer Affairs Council drew up a list of sales criteria to be included in the proposed Directive for the distance selling of financial services.
The main proposals are:
(1) the prohibition of abusive marketing practices seeking to oblige consumers to buy a service they have not solicited – so-called "inertia selling”
(2) rules to restrict other practices such as unsolicited phone calls and e-mails ("cold calling" and "spamming")
(3) an obligation to provide consumers with comprehensive information before a contract is concluded
(4) a consumer right to withdraw from the contract during a cool-off period - except in cases where there is a risk of speculation.
The newly agreed standards are in line with those already applicable to all other retail sectors.
The Council is now to adopt its common position on the proposed Directive shortly, and will proceed with its final adoption once the European Parliament has concluded its second reading on the proposal.
European internal market Commissioner, Frits Bolkestein, welcomes the initiative:
"The adoption of harmonised rules across the EU will make it easier for both consumers and suppliers to cross national boundaries in an environment of greater legal security and confidence. That is especially true for internet trade for which financial services are especially well suited. This Directive is an essential complement to the e-commerce Directive which was adopted last year and which will enter into force this coming January."
A Directive regulating the distance selling of goods and services was adopted in 1997 and entered into force last year. Financial services were excluded from its scope since they were considered to require a separate set of rules.