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No 8 (July 97/Juillet 97/Juli 97)
A Communication outlining measures to enhance consumer confidence in financial services within the Single Market has been adopted by the European Commission on the initiative of Financial Services Commissioner Mario MONTI and Consumer Policy Commissioner Emma BONINO. Building on contributions received during consultations on a May 1996 Green Paper, the Commission has concluded that further financial services initiatives are needed to meet adequately consumers' needs and expectations. The Communication therefore announces a series of forthcoming financial services initiatives including proposals for Directives on distance contracts for financial services and protecting victims of car accidents abroad, an update of the insurance intermediaries Directive, a review of the consumer credit Directive and an extension of the Recommendation on new means of payment (with a proposal for a Directive if progress is insufficient). The Commission will also consider a Directive on unregulated financial intermediaries, monitor voluntary agreements concerning consumer information and redress (and propose legislation if progress is insufficient) and launch pilot projects on tackling over-indebtedness.
"We must not only enhance consumer confidence in the Single Market for financial services but also ensure a level playing field for cross-border service providers" commented Mr Monti. "By adopting promptly the measures necessary to meet their needs, we can ensure the high standards of consumer protection required to build consumer confidence throughout the Single Market while creating an appropriate framework to encourage the development of electronic commerce within the Union."
The Single Market in financial services has promoted competition and increased consumer choice. Stringent supervision of the activities of financial service providers by Member States' authorities has reinforced the financial strength of the sector. Yet, it is also clear that more remains to be done to ensure that consumers reap the full benefits and to tackle remaining problems.
The Communication confirms that cross-border financial services still encounter too many obstacles such as different tax structures and differences in tax treatment across borders, in particular in the area of insurance and mortgage credit.
National rules adopted to protect the "general good" that disregard the principles established by the Court of Justice for the application of this concept can also create new hurdles to trade, stifling competition, restricting choice and raising costs for the consumer. The Commission has just published an interpretative Communication concerning the general good in the banking sector (see page 10) and an equivalent draft Communication concerning general good in the insurance sector is due to be published shortly. Sometimes, voluntary co-operation between the interested parties can provide solutions and should be encouraged. However, voluntary action is sometimes not enough: action also needs to be taken either by the Member States or at the level of the Union. EU-level harmonisation can be required to achieve the twin objectives of a high level of consumer protection in the EU and unrestricted access to the Single Market.
Furthermore, the Commission is committed to encourage intensively the development of electronic commerce, as announced in its recent Communication on the subject (see page 23 of this issue). Electronic commerce offers enormous opportunities not only for cross-border trading in Europe but also for improving international competitiveness - all the more so in the context of the single currency. A clear regulatory framework will give consumers the confidence to take advantage of electronic commerce opportunities and businesses the incentive to make the necessary investment.
To respond to these issues and interested parties' comments, the Commission considers that it is as much a change of attitude which is called for as a targeted programme of legislation. The Communication therefore sets out a number of proposals for new or amended Directives. Legislation is not, however, appropriate for all the problems identified. Other means, notably a dialogue between the financial services industry and consumers, are more appropriate to improve, for example, consumer information and redress.
The consultation highlighted a number of issues which require action at the EU level:
The use of distance contracts of financial services is growing rapidly, bringing new opportunities for consumers and service providers but also risks. The Commission has decided to make a proposal for a specific Directive to provide for consumer protection in the case of distance contracts for financial services by autumn 1997. The proposal also features in the Single Market Action Plan. The proposed Directive will boost consumer confidence whilst enabling service providers to market their services across the EU without unnecessary obstacles.
The Commission calls for a clear commitment from the industry and consumers to agree voluntarily improvements in the provision of information and access to redress for consumers. The Commission has asked to receive the first results of this dialogue by end-1997. The Commission will monitor progress in the period to mid-1999, to assess whether problems can be adequately solved on a self-regulatory basis or whether further initiatives, including legislation, are necessary.
On the basis of the consultations and the results of a study undertaken on its behalf, the Commission is considering a Directive on financial intermediaries. As regards insurance intermediaries, the Commission will review an existing Directive (77/92/EEC) which allows such intermediaries to establish themselves in another Member State or to provide services on a cross-border basis and the extent of implementation of the principles set out in a 1991 Recommendation (92/48/EEC) on the status and professionalism of the insurance intermediary.
By mid-1998, the Commission will review the 1987 Directive on consumer credit, taking account of the comments of interested parties and market developments. Concerning the problem of over-indebtedness, certain pilot projects will be implemented as from 1998, some of which will aim at improving consumer information and education.
The Commission will propose a Directive (the Fourth Motor Insurance Directive) by autumn 1997. This will provide that accident victims can lodge a claim against an insurer anywhere in the EU and that claims representatives will be nominated.
The Commission will decide at the beginning of 1998, in the light of the results of work currently underway, on whether to take any further initiative. In addition, the Commission has decided that the issues of information and its quality should be included in the dialogue between the industry and consumers.
Acceptance by consumers and achieving total confidence are essential for the introduction and success of any new means of payment. Transparent and secure electronic payment mechanisms in turn will facilitate the changeover to the single currency, in particular throughout the transitional period. As a first step, the Commission will very shortly up-date the existing payment systems Recommendation on minimum responsibility and liability standards for card issuers vis-à-vis card holders (88/590/EEC), taking into account the development of electronic money products. The Recommendation will be revised to:
Failing appropriate implementation of the up-dated Recommendation before the end of 1998, the Commission intends to replace it by a binding instrument.
The Commission has decided that this issue will be included in the dialogue between the industry and consumers. Indeed, interested parties considered that further measures are necessary to set common minimum requirements for insurance contracts. Such measures should make it easier for consumers to compare insurance contracts across borders without any harmonisation of contract law leading to an undesirable standardisation of products and to a stifling of innovation.
On the first issue, the Commission recognises that private companies are free to decide with whom to do business, provided that the exercise of this freedom does not give rise to anti-competitive behaviour (in which case, the Commission will take appropriate action to remedy violations of Community law, in co-operation with the Member States, including infringement procedures). On the other hand, access to a bank account is essential to modern life, like electricity or a telephone. There are still many EU citizens who are not able to open a bank account or obtain other financial services. Steps have already been taken in a number of Member States to improve the situation for social policy reasons. The Commission supports such efforts at national level, which is where any action required needs to be.
La Commission européenne a adopté une communication décrivant les mesures à prendre pour renforcer la confiance des consommateurs dans les services financiers à l'intérieur du Marché unique. Ces mesures comprennent notamment des propositions de directive concernant les contrats à distance de services financiers et la protection des victimes d'accidents de la route survenus à l'étranger. Une mise à jour de la directive sur les intermédiaires d'assurance, un réexamen de la directive sur le crédit à la consommation et une extension de la recommandation sur les nouveaux moyens de paiement (ainsi qu'une proposition de directive si les progrès accomplis sont insuffisants) sont également envisagés. La Commission envisagera aussi une directive concernant les intermédiaires financiers non réglementés, elle surveillera les progrès résultant des accords négociés spontanément en matière d'information des consommateurs et de voies de recours (et proposera un instrument législatif si les progrès sont insuffisants) et lancera des projets pilotes sur le traitement du surendettement.
Die Europäische Kommission hat eine Mitteilung über Maßnahmen zur Stärkung des Verbrauchervertrauens in Finanzdienstleistungen angenommen. Die Mitteilung kündigt eine Reihe von Maßnahmen an, mit denen den Bedürfnissen und Erwartungen der Verbraucher Rechnung getragen werden soll. Diese Maßnahmen umfassen vor allem Richtlinienvorschläge über Fernverträge für Finanzdienstleistungen sowie zum Schutz der Opfer von Kfz-Unfällen im Ausland, eine Aktualisie-rung der Richtlinie über Versicherungsvermittler, eine Überarbeitung der Verbraucherkreditrichtlinie und eine Überarbeitung der Empfehlung über neue Zahlungsmittel (einschließlich eines Richtlinienvor-schlags, falls die Fortschritte unzureichend sind). Die Kommission wird außerdem eine Richtlinie über die keiner Aufsicht unterstellten Finanzmittler in Erwägung ziehen, die freiwilligen Vereinbarungen über Verbraucherinformation und -schutz überwachen (und Rechtsakte vorschlagen, falls die Fortschritte unzureichend sind) sowie Pilotprojekte zur Überschuldung einleiten.
Confidence" is available
via the DG XV website:
For more information,