A4-0028/98

Resolution on the Commission communication to the European Parliament, the Council, the European Monetary Institute and the Economic and Social Committee 'Boosting customers' confidence in electronic means of payment in the single market' (COM(97)0353 - C4-0486/97)

The European Parliament,

- having regard to the Commission communication (COM(97)0353 - C4-0486/97),

- having regard to Commission recommendation 97/489/EC of 30 July 1997 concerning transactions by electronic payment instruments and in particular the relationship between issuer and holder ((OJ L 208, 2.8.1997, p. 52.)), attached to the communication,

- having regard to the report of the Committee on Legal Affairs and Citizens' Rights (A4-0028/98),

A. whereas the main problems associated with the use of electronic means of payment are

- unavailability of comprehensive customer information on payment instruments and on effective redress procedures,

- liabilities arising in case of loss or theft,

- the burden of proof in such situations,

- protection for the consumer in case of bankruptcy of a bank or other partner to an electronic transaction,

B. whereas technical progress in the field of electronic commerce and electronic means of payment is taking place at an increasingly fast pace; whereas it is therefore necessary to be careful not to introduce legislation that will not work in practice or will make payment systems too heavy to administer,

C. whereas these technological developments, the forthcoming single currency, increasingly intertwined national economies and highly demanding consumer attitudes will lead to a continuous rise in the market share of electronic commerce and payment,

D. whereas the intrinsically cross-border nature of this trend entails a need for equal conditions of competition in the common market and ultimately on a world-wide scale,

E. whereas security standards and liability arrangements are an essential element of these equal conditions of competition, but also for increasing consumers´ confidence,

F. whereas it will be necessary in future to reflect more deeply on the differences and similarities between the instruments described in the communication on the one hand, and between payment cards and normal bills issued by national banks on the other,

G. whereas in this context the question of who can be issuer of electronic money products should be clarified,

1. Is of the opinion that a proposal for a Directive on electronic payment instruments as well as money transactions effected in connection with the Internet might indeed become necessary;

2. Asks the Commission to submit such a proposal only after a thorough inquiry into the degree of implementation of the recommendation, problems that have arisen and problems which may be expected to arise; it should also take account of the need to differentiate the rules concerning credit cards, payment cards, cash cards and payment systems;

3. Observes that the recommendation´s applicability to Internet transactions is anything but clear;

4. Asks therefore the Commission to present in the meantime, as a separate text, a viable draft for a legal solution to problems related to money transactions effected in connection with the Internet;

5. Makes it clear that, if legislation in the field is proposed, it will not accept provisions relating to scope and definitions as enigmatic and unclear as those contained in Articles 1 and 2 of Recommendation 97/489/EC;

6. Communicates to the Commission its preference for self-regulatory mechanisms rather than heavy legislation for attaining consumer protection and high security standards; the core of such self-regulatory mechanisms could consist of liability arrangements acting as an incentive both for:

- issuers of electronic payment instruments to avert possible losses through high security standards,

- holders to avoid being held liable for losses by acting cautiously and with due diligence;

7. States that in order to make self-regulatory mechanisms effective at least four sets of rules have to be introduced:

a) rules aimed at ensuring customer awareness about potential liabilities,

b) clear and fair provisions on liabilities arising in case of loss or theft,

c) rules on the burden of proof in cases of loss or theft of electronic payment instruments which do not render proof excessively difficult or virtually impossible for holders suffering the consequences of such situations,

d) rules to protect consumers in the event of failure of a supplier, card issuer or any financial institution in the electronic transaction;

8. Is of the opinion that customer awareness can only be fostered by an obligation on the issuer to give the client copies of the contract and all applicable conditions, written in an understandable form, or make them available to him by electronic means, when the client has given an electronic address;

9. Is further of the opinion that liability arrangements such as those laid down in the recommendation, in particular in Article 6, are an interesting example of fair rules in that field;

10. Regrets that the key issue of the burden of proof has not been fully addressed in the recommendation, neither has the deplorable practice of banks charging commission in addition to their buying/selling margin of profit;

11. Suggests that the problem of proving certain constituting elements of the client´s claims in issues relating to liability after loss or theft could be resolved through provisions contained in substantive Community law, to be transposed into substantive national law which either

a) rule that it suffices for the realization of a claim of a card holder that the latter provide some evidence making the existence of a certain factual situation credible or highly probable, or

b) rule that the provision of some evidence has to be considered as having the value of a full proof under the national legal system applicable;

12. Welcomes rules on the value of electronic signatures which will avoid situations which place the whole risk on the consumer; believes that Article 6(3) of Recommendation 97/489/EC could be an interesting starting point for binding legislation in that field;

13. Instructs its President to forward this resolution to the Commission, the Council and the parliaments of the Member States.