On 23 October 2023, the European Council announced that it has approved the European Parliament’s position on proposed legislation intended to make it safer to contract financial services online or by phone.
The proposed directive amends the Consumer Rights Directive (CRD) and repeals the Directive concerning the distance marketing of consumer financial services (Distance Marketing Directive). It introduces new provisions for financial services contracts concluded at a distance and seeks to simplify the legislative framework, and certain articles of the CRD will also apply to financial services sold at a distance.
In its press release, the Council notes that the final text of the directive:
- Clarifies the scope of application and the safety net feature for financial services.
- Improves the rules on information disclosure and modernises pre-contractual information obligations (leaving it open for Member States to impose stricter national rules in this area).
- Establishes the right of consumers to request human intervention on sites that display automatic information tools like robo-advice or chatbots.
- Facilitates the right of withdrawal from contracts concluded at a distance through an easy-to-find ‘withdrawal function’ in the provider’s interface.
- Introduces additional protection for consumers from dark patterns (a user interface designed to trick users into doing unplanned things, like buying products they were not looking for).
The review of the Distance Marketing Directive is part of the European Commission’s new consumer agenda.
Following the Council’s approval of the European Parliament’s position, the legislative act has been adopted. After being signed by the President of the European Parliament and the President of the Council, the directive will be published in the Official Journal of the European Union and will enter into force on the 20th day following its publication.