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No 21 (May 2000/Mai 2000/Mai 2000)
In mid-May, the Commission held its third joint meeting with the national dispute settlement bodies in the financial services sector. The aim of these meetings is to establish a framework for co-operation between these national bodies in a cross-border complaints network so that the consumers can have easy access to out-of-court redress procedures when shopping for financial services across borders. The meetings' participants have, from the beginning, expressed their willingness to co-operate and good progress has been made in finding feasible solutions for procedural arrangements. The need for such a network has become increasingly relevant particularly given the growing importance of on-line financial services.
The initiative was introduced in the Financial Services Action Plan (see SMN 17) in May 1999. According to the Action Plan consumer uncertainty about the possibilities of redress in the event of a cross-border contractual dispute is amongst the most significant stumbling blocks to the development of Single Market in retail financial services. There is a need to find effective and efficient judicial and extra-judicial settlement of disputes to provide necessary confidence in cross-border activity. The Action Plan suggests that the Commission should encourage networking between national extra-judicial dispute settlement bodies in order to promote co-operation with a view to resolving cross-border disputes.
Out-of-court redress procedures for financial services exist in nearly all Member States, particularly for the banking and insurance sectors. Due to the variations between legal systems and cultures, dispute settlement has been organised differently in different Member States. The network will bring together various types of schemes - both public and private - the only criteria being that the bodies should strive to comply with certain principles (i.e independence, transparency, effectiveness, legality and liberty) set out in the Commission Recommendation 98/257 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes. The participation in the complaints network is voluntary for the bodies. The Commission's role in the establishment of the co-operation is that of a catalyst and a facilitator.
The basic idea behind the co-operation network is that the consumer of cross-border financial services will be able to complain to a third party in case of a dispute. This is carried through by providing him with an access to the out-of-court redress scheme his service supplier belongs to (the competent scheme) via the redress scheme in his own country of residence (the nearest scheme). This nearest scheme would give the consumer information about the competent dispute settlement body and the complaint procedure. The actual dispute settlement is handled by the scheme in the supplier's home country since it is best placed to ensure the enforcement of any decisions made in the case.
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