Common Position (EC) No 16/2002 of 19 December 2001 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a Directive of the European Parliament and of the Council concerning the distance marketing of consumer financial services and amending Council Directives 90/619/EEC, 97/7/EC and 98/27/EC
Date: 2001-12-19
Institutions: Council of the European Union
Subjects: consumer protection, contract, distance selling, financial market, single market

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COMMON POSITION (EC) No 16/2002

adopted by the Council on 19 December 2001

with a view to adopting Directive 2002/. . ./EC of the European Parliament and of the Council of
. . . concerning the distance marketing of consumer financial services and amending Council
Directives 90/619/EEC, 97/7/EC and 98/27/EC

(2002/C 58 E/04)

THE EUROPEAN PARLIAMENT AND THE COUNCIL
OF THE EUROPEAN UNION,

also established in the Member State in which the
consumer resides.

Having regard to the Treaty establishing the European
Community, and in particular Articles 47(2), 55 and 95
thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of
Committee (2),

the Economic and Social

Acting in accordance with the procedure laid down in Article
251 of the Treaty (3),

Whereas:

(1) It is important, in the context of achieving the aims of the
single market, to adopt measures designed to consolidate
progressively this market, and those measures must
to attaining a high level of
contribute
consumer
protection,
in accordance with Articles 95 and 153 of
the Treaty.

(2) Both for consumers and suppliers of financial services, the
distance marketing of financial services will constitute one
of the main tangible results of the completion of the
internal market.

(3) Within the framework of the internal market, it is in the
interest of consumers to have access without discrimi-
nation to the widest possible range of financial services
available in the Community so that they can choose those
that are best suited to their needs. In order to safeguard
freedom of choice, which is an essential consumer right, a
high degree of consumer protection is required in order
to enhance consumer confidence in distance selling.

(4) It is essential to the smooth operation of the internal
to be able to negotiate and
market
conclude contracts with a supplier established in other
is
Member States, regardless of whether

for consumers

the supplier

(1) OJ C 385, 11.12.1998, p. 10 and OJ C 177 E, 27.6.2000, p. 21.
(2) OJ C 169, 16.6.1999, p. 43.
(3) Opinion of the European Parliament of 5 May 1999 (OJ C 279,
1.10.1999, p. 197), Council Common Position of 19 December
2001 and Decision of the European Parliament of
(not yet
published in the Official Journal).

. . .

(5) Because of their intangible nature, financial services are
particularly suited to distance selling and the estab-
lishment of a legal
framework governing the distance
marketing of financial services should increase consumer
confidence in the use of new techniques for the distance
electronic
marketing of
commerce.

such as

financial

services,

(6) This Directive should be applied in conformity with the
including Directive
Treaty and with secondary law,
2000/31/EC (4) on electronic commerce, the latter being
applicable solely to the transactions which it covers.

(7) This Directive aims to achieve the objectives set forth
law
above without prejudice to Community or national
governing
services or, where
applicable, host Member State control and/or author-
isation or supervision systems in the Member States
where this is compatible with Community legislation.

freedom to provide

(8) Moreover, this Directive, and in particular its provisions
relating to information about any contractual clause on
law applicable to the contract and/or on the competent
court does not affect
the applicability to the distance
marketing of consumer financial services of Council Regu-
lation (EC) No 44/2001 of 22 December 2000 on juris-
diction and the recognition and enforcement of judgments
in civil and commercial matters (5) or of the 1980 Rome
Convention on the Law Applicable to Contractual Obli-
gations.

(9) The achievement of the objectives of the financial services
action plan requires a higher level of consumer protection
in
in certain areas. This implies a greater convergence,
particular,
investment
funds, rules of conduct applicable to investment services
and consumer credits. Pending the achievement of the
above convergence, a high level of consumer protection
should be maintained.

in non-harmonised

collective

(10) Directive 97/7/EC of the European Parliament and of the
Council of 20 May 1997 on the protection of consumers
in respect of distance contracts (6),
lays down the main
rules applicable to distance contracts for goods or services
concluded between a supplier and a consumer. However,
that Directive does not cover financial services.

(4) OJ L 178, 17.7.2000, p. 1.
(5) OJ L 12, 16.1.2001, p. 1.
(6) OJ L 144, 4.6.1997, p. 19.

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(11) In the

the

analysis

context of

conducted by the
Commission with a view to ascertaining the need for
specific measures in the field of financial services, the
Commission invited all the interested parties to transmit
their comments, notably in connection with the prep-
aration of its Green Paper entitled (cid:145)Financial services (cid:151)
Meeting consumers’ expectations(cid:146). The consultations in
this context showed that there is a need to strengthen
consumer protection in this area. The Commission
proposal
present
therefore
concerning the distance marketing of financial services.

decided

specific

to

a

(12) The adoption by the Member States of conflicting or
different
the
consumer protection rules
distance marketing of consumer financial services could
impede the functioning of
the internal market and
competition between firms in the market. It is therefore
necessary to enact common rules at Community level in
this
consistent with no reduction in overall
consumer protection in the Member States.

governing

area,

(13) A high level of consumer protection should be guaranteed
by this Directive, with a view to ensuring the free
movement of
financial services. Member States should
not be able to adopt provisions other than those laid
down in this Directive in the fields it harmonises, unless
otherwise specifically indicated in it.

(14) This Directive covers all

a distance. However,
governed

financial services liable to be
certain financial
provided at
services
of
provisions
by
are
Community legislation which continue to apply to those
services. However, principles governing the
financial
distance marketing of such services should be laid down.

specific

(15) Contracts negotiated at a distance involve the use of
means of distance communication which are used as
part of a distance sales or service-provision scheme not
involving the simultaneous presence of the supplier and
the consumer. The constant development of those means
of communication requires principles to be defined that
are valid even for those means which are not yet in wide-
spread use. Therefore, distance contracts are those the
offer, negotiation and conclusion of which are carried
out at a distance.

(16) A single contract

it

is important

involving successive operations or
separate operations of the same nature performed over
time may be subject to different legal treatment in the
different Member States, but
this
Directive be applied in the same way in all the Member
States. To that end, it is appropriate that this Directive
should be considered to apply to the first of a series of
successive operations or separate operations of the same
nature performed over time which may be considered as
forming a whole, irrespective of whether that operation or
series of operations is the subject of a single contract or
several successive contracts.

that

(17) An (cid:145)initial service agreement(cid:146) may be considered to be for
example the opening of a bank account, acquiring a credit
card, concluding a portfolio management contract, and
(cid:145)operations(cid:146) may be considered to be, for example, the
funds to or from the bank
deposit or withdrawal of
account, payment by credit card,
transactions made
a portfolio management
within the
contract. Adding new elements
service
agreement, such as the possibility of using an electronic
together with one’s existing bank
payment
account, does not constitute an (cid:145)operation(cid:146) but an
additional contract to which this Directive applies. The
subscription to new units of
collective
investment fund is considered to be one of (cid:145)successive
operations of the same nature(cid:146).

framework of

to an initial

instrument

same

the

(18) By covering a service-provision scheme organised by the
financial services provider, this Directive aims to exclude
from its scope services provided on a strictly occasional
basis and outside a commercial structure dedicated to the
conclusion of distance contracts.

(19) The supplier is the person providing services at a distance.
This Directive should however also apply when one of the
marketing stages involves an intermediary. Having regard
to the nature and degree of
the
this Directive should apply to
pertinent provisions of
such an intermediary,
irrespective of his or her legal
status.

involvement,

that

(20) Durable mediums

include in particular

floppy discs,
CD-ROMs, DVDs and the hard drive of the consumer’s
computer on which the electronic mail is stored, but they
do not include Internet websites unless they fulfil the
criteria contained in the definition of a durable medium.

(21) The use of means of distance communications should not
lead to an unwarranted restriction on the information
provided to the client.
In the interests of transparency
this Directive lays down the requirements needed to
information is
ensure that an appropriate level of
and after
provided to the
should
conclusion of
receive, before conclusion of
the prior
information needed so as
to properly appraise the
financial service offered to him and hence make a well-
informed choice. The supplier should specify how long
his offer applies as it stands.

consumer both before

contract. The

the contract,

consumer

the

(22) Information

in

listed

items

financial

this Directive

services. Other

cover
information of a general nature applicable to all kinds
information requirements
of
the
concerning a given financial
coverage of an insurance policy, are not solely specified
in this Directive. This kind of
information should be
provided in accordance, where applicable, with relevant
Community
in
or
conformity with Community law.

legislation

legislation

such as

national

service,

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(23) With a view to optimum protection of the consumer, it is
important that the consumer is adequately informed of
the provisions of
this Directive and of any codes of
conduct existing in this area and that he has a right of
withdrawal.

(24) When the right of withdrawal does not apply because the
consumer has expressly requested the performance of a
contract, the supplier should inform the consumer of this
fact.

(25) Consumers

should be protected against unsolicited
services. Consumers should be exempt
from any obli-
gation in the case of unsolicited services, the absence of
a reply not being construed as signifying consent on their
part. However, this rule should be without prejudice to
the tacit renewal of contracts validly concluded between
the parties whenever
the Member States
the law of
permits such tacit renewal.

(26) Member States

should take appropriate measures

to
protect effectively consumers who do not wish to be
contacted through certain means of communication or
at certain times. This Directive should be without
to
prejudice
consumers under Community legislation concerning the
protection of personal data and privacy.

to the particular

safeguards

available

(27) With a view to protecting consumers, there is a need for
suitable and effective complaint and redress procedures in
the Member States with a view to settling potential
disputes between suppliers and consumers, by using,
where appropriate, existing procedures.

(28) Member States should encourage public or private bodies
established with a view to settling disputes out of court to
cooperate in resolving cross-border disputes. Such coop-
eration could in particular entail allowing consumers to
submit to extrajudicial bodies in the Member State of their
residence complaints concerning suppliers established in
other Member States. The establishment of FIN-NET offers
increased assistance to consumers when using cross-
border services.

(29) This Directive is without prejudice to extension by
Member States,
in accordance with Community law, of
the protection provided by this Directive to non-profit
organisations
financial
services in order to become entrepreneurs.

and persons making use of

(30) This Directive should also cover cases where the national
legislation includes the concept of a consumer making a
binding contractual statement.

(31) The provisions in this Directive on the supplier’s choice of
language should be without prejudice to provisions of

national
Community law governing the choice of language.

legislation,

adopted

conformity with

in

(32) The Community and the Member States have entered into
commitments in the context of the General Agreement on
Trade in Services (GATS) concerning the possibility for
consumers of purchasing
investment
services abroad. The GATS entitles Member States to
including
adopt measures
measures to protect investors, depositors, policyholders
and persons to whom a financial service is owed by the
supplier of the financial service. Such measures should
not impose restrictions going beyond what is required
to ensure the protection of consumers.

prudential

banking

reasons,

and

for

(33) In view of the adoption of this Directive, the scope of
the
Directive 97/7/EC and Directive 98/27/EC of
European Parliament and of
the Council of 19 May
1998 on injunctions for the protection of consumers’
interests (1) and the scope of the cancellation period in
Council Directive 90/619/EEC of 8 November 1990 on
the coordination of laws, regulations and administrative
provisions relating to direct life assurance,
laying down
provisions to facilitate the effective exercise of freedom
to provide services (2) should be adapted.

cannot

services

financial

(34) Since the objectives of this Directive, namely the estab-
lishment of common rules on the distance marketing of
sufficiently
consumer
achieved by the Member States and can therefore be
better achieved at Community level,
the Community
may adopt measures,
in accordance with the principles
of subsidiarity as set out in Article 5 of the Treaty. In
accordance with the principle of proportionality, as set
out in that Article, this Directive does not go beyond
what is necessary to achieve those objectives,

be

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Object and scope

1.
The objective of this Directive is to approximate the laws,
regulations and administrative provisions of the Member States
financial
concerning the distance marketing of consumer
services.

In the case of contracts for financial services comprising
2.
an initial service agreement followed by successive operations
or a series of separate operations of the same nature performed
over time, the provisions of this Directive shall apply only to
the initial agreement.

(1) OJ L 166, 11.6.1998, p. 51. Directive as last amended by Directive

2000/31/EC (OJ L 178, 17.7.2001, p. 1).

(2) OJ L 330, 29.11.1990, p. 50. Directive as last amended by Directive

92/96/EEC (OJ L 360, 9.12.1992, p. 1).

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In the case where there is no initial service agreement but the
successive operations or the separate operations of the same
nature performed over time are performed between the same
contractual parties, Articles 3 and 4 apply only when the first
operation is performed. Where, however, no operation of the
same nature is performed for more than one year, the next
operation will be deemed to be the first in a new series of
operations and, accordingly, Articles 3 and 4 shall apply.

Article 2

Definitions

For the purposes of this Directive:

(a) (cid:145)distance contract(cid:146) means any contract concerning financial
services concluded between a supplier and a consumer
service-provision
under an organised distance sales or
scheme run by the supplier, who, for the purpose of that
contract, makes exclusive use of one or more means of
distance communication up to and including the time at
which the contract is concluded;

(b) (cid:145)financial service(cid:146) means any service of a banking, credit,
insurance, personal pension, investment or payment nature;

(c) (cid:145)supplier(cid:146) means any natural or legal person, public or
private, who, acting in his commercial or professional
capacity, is the contractual provider of services subject to
distance contracts;

(d) (cid:145)consumer(cid:146) means any natural person who,

in distance
contracts covered by this Directive, is acting for purposes
which are outside his trade, business or profession;

(e) (cid:145)means of distance communication(cid:146) refers to any means
which, without the simultaneous physical presence of the
supplier and the consumer, may be used for the distance
marketing of a service between those parties;

(f)

(cid:145)durable medium(cid:146) means any instrument which enables the
consumer to store information addressed personally to him
in a way accessible for future reference for a period of time
adequate for the purposes of the information and which
allows the unchanged reproduction of
the information
stored;

(g) (cid:145)operator or supplier of a means of distance communi-
legal
cation(cid:146) means any public or private, natural or
person whose
trade, business or profession involves
making one or more means of distance communication
available to suppliers.

Article 3

Information to the consumer prior to the conclusion of
the distance contract

1.
In good time before the consumer is bound by any
distance contract or offer, he shall be provided with the
following information concerning:

(1) the supplier:

(a) the identity and the main business of the supplier, the
geographical address at which the supplier is estab-
lished and any other geographical address relevant for
the customer’s relations with the supplier;

(b) the identity of the representative of the supplier estab-
lished in the consumer’s Member State of residence and
for the customer’s
the geographical address relevant
relations with the representative,
if such a represen-
tative exists;

(c) when the consumer’s dealings are with any professional
other than the supplier, the identity of this professional,
the capacity in which he is acting vis-(cid:224)-vis
the
consumer, and the geographical address relevant for
the customer’s relations with this professional;

(d) where the supplier is registered in a trade or similar
public register, the trade register in which the supplier
is entered and his registration number or an equivalent
means of identification in that register;

(e) where the supplier’s activity is subject to an author-
isation scheme, the particulars of the relevant super-
visory authority;

(2) the financial service:

(a) a description of the main characteristics of the financial

service;

(b) the total price to be paid by the consumer to the
supplier for the financial service, including all related
fees, charges and expenses, and all taxes paid via the
supplier or, when an exact price cannot be indicated,
the basis for the calculation of the price enabling the
consumer to verify it;

(c) where relevant notice indicating that

related to instruments

the financial
service is
involving special
risks related to their specific features or the operations
to be executed or whose price depends on fluctuations
in the financial markets outside the supplier’s control
and that historical performances are no indicators for
future performances;

(d) notice of the possibility that other taxes and/or costs
may exist that are not paid via the supplier or imposed
by him;

(e) any limitations of the period for which the information

provided is valid;

(f)

the arrangements for payment and for performance;

(g) any specific additional cost for the consumer of using
such

communication,

if

the means of distance
additional cost is charged;

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(3) the distance contract:

protection of those who are unable, pursuant to the legislation
of the Member States, to give their consent, such as minors.

(a) the existence or absence of a right of withdrawal

in
accordance with Article 6 and, where the right of with-
drawal exists, its duration and the conditions for exer-
cising it, including information on the amount which
the consumer may be required to pay on the basis of
Article 7(1),
of
as
non-exercise of that right;

consequences

as well

the

(b) the minimum duration of the distance contract in the
case of financial services to be performed permanently
or recurrently;

(c)

information on any rights the parties may have to
terminate the contract early or unilaterally by virtue
of the terms of the distance contract,
including any
penalties imposed by the contract in such cases;

(d) practical instructions for exercising the right of with-
inter alia, the address to which the

drawal indicating,
notification of a withdrawal should be sent;

(e)

the Member State or States whose laws are taken by the
supplier as a basis for the establishment of relations
with the consumer prior to the conclusion of
the
distance contract;

(f) any contractual clause on law applicable to the distance

contract and/or on competent court;

(g) which language, or languages, the contractual terms
and conditions, and the prior information referred to
in this Article are supplied in, and furthermore in
which language, or languages, the supplier, with the
to
the
agreement
communicate during the duration of
this distance
contract;

undertakes

consumer,

of

(4) redress:

(a) whether or not there is an out-of-court complaint and
redress mechanism for the consumer that is party to
the distance contract and, if so, the methods for having
access to it;

(b) the existence of guarantee funds or other compensation
arrangements, not covered by Directive 94/19/EC of the
European Parliament and of the Council of 30 May
1994 on deposit guarantee schemes (1) and Directive
97/9/EC of
the
Council of 3 March 1997 on investor compensation
schemes (2).

the European Parliament and of

The

information referred to in paragraph 1,

2.
the
commercial purpose of which must be made clear, shall be
provided in a clear and comprehensible manner in any way
appropriate to the means of distance communication used,
with due regard, in particular, to the principles of good faith
in commercial transactions, and the principles governing the

(1) OJ L 135, 31.5.1994, p. 5.
(2) OJ L 84, 26.3.1997, p. 22.

3.

In the case of voice telephony communications:

(a) the identity of the supplier and the commercial purpose of
the call initiated by the supplier shall be made explicitly
clear at
the beginning of any conversation with the
consumer;

(b) subject to the explicit consent of the consumer only the

following information needs to be given:

(cid:151) the identity of the person in contact with the consumer

and his link with the supplier,

(cid:151) a description of the main characteristics of the financial

service,

(cid:151) the total price to be paid by the consumer to the
taxes
supplier for the financial service including all
paid via the supplier or, when an exact price cannot
be indicated, the basis for the calculation of the price
enabling the consumer to verify it,

(cid:151) notice of the possibility that other taxes and/or costs
may exist that are not paid via the supplier or imposed
by him,

(cid:151) the existence or absence of a right of withdrawal

in
accordance with Article 6 and, where the right of with-
drawal exists, its duration and the conditions for exer-
cising it, including information on the amount which
the consumer may be required to pay on the basis of
Article 7(1).

The supplier shall inform the consumer that other information
is available on request and of what nature this information is.
In any case the supplier shall provide the full information when
he fulfils his obligations under Article 5.

on

Information

be
contractual
4.
communicated to the consumer during the pre-contractual
phase, shall be in conformity with the contractual obligations
which would result from the law presumed to be applicable to
the distance contract if the latter were concluded.

obligations,

to

Article 4

Additional information requirements

1. Where there are provisions in the Community legislation
governing financial services which contain prior information
requirements additional to those listed in Article 3(1), these
requirements shall continue to apply.

2.
Pending further harmonisation, Member States may
maintain or introduce more stringent provisions on prior
information requirements when the provisions
in
conformity with Community law.

are

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3. Member States shall communicate to the Commission
national provisions on prior information requirements under
paragraphs 1 and 2 of this Article when these requirements are
additional to those listed in Article 3(1). The Commission shall
take account of the communicated national provisions when
drawing up the report referred to in Article 20(2).

in addition to the right of withdrawal, may
Member States,
the
relating to
provide
investment
same period
services
provided for in this paragraph.

contracts
the

enforceability of

suspended for

that

is

2.

The right of withdrawal shall not apply to:

4.
The Commission shall, with a view to creating a high
level of transparency by all appropriate means, ensure that
information, on the national provisions communicated to it,
is made available to consumers and suppliers.

(a)

financial services whose price depends on fluctuations in
the financial market outside the supplier’s control, which
may occur during the withdrawal period, such as services
related to:

Article 5

(cid:151) foreign exchange,

Communication of the contractual terms and conditions
and of the prior information

(cid:151) money market instruments,

The supplier shall communicate to the consumer all the
1.
contractual terms and conditions and the information referred
to in Articles 3(1) and 4 on paper or on another durable
medium available and accessible to the consumer in good
time before the consumer is bound by any distance contract
or offer.

2.
The supplier shall fulfil his obligation under paragraph 1
immediately after the conclusion of the contract, if the contract
has been concluded at the consumer’s request using a means of
distance communication which does not enable providing the
contractual
terms and conditions and the information in
conformity with paragraph 1.

At any time during the contractual

3.
relationship the
consumer is entitled, at his request, to receive the contractual
terms and conditions on paper. In addition, the consumer is
entitled to change the means of distance communication used,
unless this is incompatible with the contract concluded or the
nature of the financial service provided.

(cid:151) transferable securities,

(cid:151) units in collective investment undertakings,

(cid:151) financial-futures contracts,

including equivalent cash-

settled instruments,

(cid:151) forward interest-rate agreements (FRAs),

(cid:151) interest-rate, currency and equity swaps,

(cid:151) options

to acquire or dispose of any instruments
referred to in this point
including equivalent cash-
settled instruments. This category includes in particular
options on currency and on interest rates;

(b) travel and baggage insurance policies or similar short-term
insurance policies of less than one month’s duration;

Article 6

Right of withdrawal

(c) contracts whose performance has been fully completed by
both parties at the consumer’s express request before the
consumer exercises his right of withdrawal.

1.
The Member States shall ensure that the consumer shall
have a period of 14 calendar days to withdraw from the
contract without penalty and without giving any reason.
However, this period shall be extended to 30 calendar days
in distance contracts relating to life insurance covered by
Directive 90/619/EEC and personal pension operations.

The period for withdrawal shall begin:

(cid:151) either from the day of

the conclusion of

the distance
contract, except
the said life assurance,
where the time limit will begin from the time when the
consumer is informed that the distance contract has been
concluded, or

in respect of

(cid:151) from the day on which the consumer

the
contractual terms and conditions and the information in
accordance with Article 5(1) or (2),
if that is later than
the date referred to in the first indent.

receives

3. Member States may provide that the right of withdrawal
shall not apply to:

(a) any credit intended primarily for the purpose of acquiring
or retaining property rights in land or in an existing or
projected building, or for the purpose of renovating or
improving a building; or

(b) any credit

secured either by mortgage on immovable

property or by a right related to immovable property.

This paragraph shall be without prejudice to the right to a
reflection time to the benefit of
the consumers that are
resident in those Member States where it exists, at the time
of the adoption of this Directive.

4. Member States making use of the possibility set out in
paragraph 3 shall communicate it to the Commission.

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The Commission shall make available the information
5.
communicated by Member States to the European Parliament
and to the Council and shall ensure that it is also available to
consumers and suppliers who request it.

If

6.
the consumer exercises his right of withdrawal, he
shall, before the expiry of the relevant deadline, notify this
following the practical instructions given to him in accordance
with Article 3(1)(3)(d) by means which can be proved in
law. The deadline shall be deemed
accordance with national
to have been observed if the notification, if it is on paper or
on another durable medium available and accessible to the
recipient, is dispatched before the deadline expires.

7.
This Article does not apply to credit agreements cancelled
under the conditions of Article 6(4) of Directive 97/7/EC or
Article 7 of Directive 94/47/EC of the European Parliament and
of
the Council of 26 October 1994 on the protection of
purchasers in respect of certain aspects of contracts relating
to the purchase of the right to use immovable properties on
a timeshare basis (1).

If to a distance contract of a given financial service another
distance
contract has been attached concerning services
provided by the supplier or by a third party on the basis of
an agreement between the third party and the supplier, this
additional distance contract shall be cancelled, without any
penalty, if the consumer exercises his right of withdrawal as
provided for in Article 6(1).

8.
The provisions of this Article are without prejudice to the
Member States’ laws and regulations governing the cancellation
or termination or non-enforceability of a distance contract or
the right of a consumer to fulfil his contractual obligations
before the time fixed in the distance contract. This applies
irrespective of the conditions for and the legal effects of the
winding-up of the contract.

conformity with Article 3(1)(3)(a). However, in no case may he
require such payment if he has commenced the performance of
the withdrawal period
the contract before the expiry of
provided for in Article 6(1) without
the consumer’s prior
request.

4.
The supplier shall, without any undue delay and no later
than within 30 calendar days, return to the consumer any sums
he has received from him in accordance with the distance
contract, except for the amount referred to in paragraph 1.
This period shall begin from the day on which the supplier
receives the notification of withdrawal.

5.
The consumer shall return to the supplier any sums
and/or property he has received from the supplier without
any undue delay and no later than within 30 calendar days.
This period shall begin from the day on which the consumer
dispatches the notification of withdrawal.

Article 8

Payment by card

Member States shall ensure that appropriate measures exist to
allow a consumer:

(cid:151) to request cancellation of a payment where fraudulent use
has been made of his payment card in connection with
distance contracts,

(cid:151) in the event of such fraudulent use, to be re-credited with

the sums paid or have them returned.

Article 9

Unsolicited services

Article 7

Payment of the service provided before withdrawal

Without prejudice to Member States provisions on the tacit
renewal of distance contracts, when such rules permit tacit
renewal, Member States shall take the necessary measures to:

1. When the consumer exercises his right of withdrawal
under Article 6(1) he may only be required to pay, without
for the service actually provided by the
any undue delay,
amount
supplier
payable shall not:

in accordance with the

contract. The

(cid:151) prohibit

the supply of

financial services to a consumer
without a prior request on his part, when this supply
includes a request for immediate or deferred payment,

(cid:151) exceed an amount which is in proportion to the extent of
the service already provided in comparison with the full
coverage of the contract,

(cid:151) exempt the consumer from any obligation in the event of
unsolicited supplies, the absence of a reply not constituting
consent.

(cid:151) in any case be such that it could be construed as a penalty.

2. Member States may provide that the consumer cannot be
required to pay any amount when withdrawing from an
insurance contract.

Article 10

Unsolicited communications

1.
The use by a supplier of the following distance communi-
cation techniques shall require the consumer’s prior consent:

The supplier may not require the consumer to pay any
3.
amount on the basis of paragraph 1 unless he can prove that
the consumer was duly informed about the amount payable, in

(a) automated calling systems without human intervention

(automatic calling machines);

(1) OJ L 280, 29.10.1994, p. 83.

(b) fax machines.

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shall ensure that means of distance
2. Member States
communication other than those referred to in paragraph 1,
when they allow individual communications:

(a) shall not be authorised unless the consent of the consumers

concerned has been obtained; or

(b) may only be used if the consumer has not expressed his

manifest objection.

The measures referred to in paragraphs 1 and 2 shall not

3.
entail costs for consumers.

Article 11

Sanctions

take the measures necessary to
3. Member States shall
ensure that operators and suppliers of means of distance
communication put an end to practices
that have been
declared to be contrary to this Directive, on the basis of a
judicial decision, an administrative decision or a decision
issued by a supervisory authority notified to them, where
those operators or suppliers are in a position to do so.

Article 14

Out-of-court redress

1. Member States shall promote the setting up or devel-
opment of adequate and effective out-of-court complaints and
redress procedures for the settlement of consumer disputes
concerning financial services provided at distance.

Member States shall provide for appropriate sanctions in the
event of
failure to comply with national
provisions adopted pursuant to this Directive.

the supplier’s

2. Member States shall, in particular, encourage the bodies
responsible for out-of-court settlement of disputes to cooperate
in the resolution of cross-border disputes concerning financial
services provided at distance.

They may provide for this purpose in particular that
the
consumer may cancel the contract at any time, free of charge
and without penalty.

These sanctions must be effective, proportional and dissuasive.

Article 12

Imperative nature of this Directive’s provisions

Consumers may not waive the rights conferred on them

1.
by this Directive.

2. Member States shall take the measures needed to ensure
that the consumer does not lose the protection granted by this
Directive by virtue of the choice of the law of a non-member
country as the law applicable to the contract, if this contract
has a close link with the territory of one or more Member
States.

Article 13

Judicial and administrative redress

1. Member States shall ensure that adequate and effective
means exist to ensure compliance with this Directive in the
interests of consumers.

The means referred to in paragraph 1 shall

include
2.
provisions whereby one or more of the following bodies, as
determined by national
law, may take action in accordance
with national
law before the courts or competent adminis-
trative bodies to ensure that the national provisions for the
implementation of this Directive are applied:

(a) public bodies or their representatives;

(b) consumer organisations having a legitimate interest

in

protecting consumers;

Article 15

Burden of proof

Without prejudice to Article 7(3), Member States may stipulate
that the burden of proof in respect of the supplier’s obligations
to
to inform the consumer and the consumer’s consent
conclusion of
its
appropriate,
and, where
performance, can be placed on the supplier.

contract

the

the respect by the supplier of all or part of

Any contractual term or condition providing that the burden of
proof of
the
obligations
to this Directive
should lie with the consumer shall be an unfair term within
the meaning of Council Directive 93/13/EEC of 5 April 1993
on unfair terms in consumer contracts (1).

incumbent on him pursuant

Article 16

Transitional measures

Member States may impose national
rules which are in
conformity with this Directive on suppliers established in a
transposed this Directive
Member State which has not yet
and whose law has no obligations corresponding to those
provided for in this Directive.

Article 17

Directive 90/619/EEC

In Article 15(1) of Directive 90/619/EEC the first subparagraph
shall be replaced by the following:

Each Member State shall prescribe that a policyholder
(cid:145)1.
who concludes an individual
life-assurance contract shall
have a period of 30 calendar days, from the time when
he was informed that the contract had been concluded,
within which to cancel the contract.(cid:146)

(c) professional organisations having a legitimate interest in

acting.

(1) OJ L 95, 21.4.1993, p. 29.

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Article 18

Directive 97/7/EC

Directive 97/7/EC is hereby amended as follows:

1. The first indent of Article 3(1) shall be replaced by the

following:

(cid:145) (cid:151) relating to any financial service to which Directive
the
2002/. . ./EC of
Council of . . . concerning the distance marketing of
consumer financial services (*) applies.

the European Parliament and of

___________
(*) OJ L . . .(cid:146);

2. Annex II shall be deleted.

Article 19

Directive 98/27/EC

The following point shall be added to the Annex to Directive
98/27/EC:

(cid:145)11. Directive 2002/. . ./EC of the European Parliament and of
the Council of . . . concerning the distance marketing of
consumer
and amending Council
Directives 90/619/EEC, 97/7/EC and 98/27/EC (*).

financial

services

(*) OJ L . . .(cid:146).

Article 20

Review

this Directive,

the
Following the implementation of
1.
Commission shall examine the functioning of
the internal
market in financial services in respect of the marketing of
those services.
the
difficulties that are, or might be faced by both consumers
in particular arising from differences between
and suppliers,
national provisions regarding information and right of with-
drawal.

should seek to analyse and detail

It

on the problems facing both consumers and suppliers seeking
to buy and sell
financial services, and shall submit, where
appropriate, proposals to amend and/or further harmonise
the
in
information and right of withdrawal provisions
Community legislation concerning financial services and/or
those covered in Article 3.

Article 21

Transposition

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive not later than . . . (**). They shall forthwith inform
the Commission thereof.

When Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such a
their official publication. The
reference on the occasion of
methods of making such reference shall be laid down by
Member States.

2. Member States shall communicate to the Commission the
text of the main provisions of national law which they adopt in
the field governed by this Directive together with a table
showing how the provisions of this Directive correspond to
the national provisions adopted.

Article 22

Entry into force

This Directive shall enter into force on the day of its publi-
cation in the Official Journal of the European Communities.

Article 23

Addressees

This Directive is addressed to the Member States.

Done at . . .

Not later than 31 December 2003 (*) the Commission
2.
shall report to the European Parliament and to the Council

For the European Parliament

The President

For the Council

The President

(*) Forty-two months after the entry into force of this Directive.

(**) Two years after the entry into force of this Directive.

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STATEMENT OF THE COUNCIL’S REASONS

I.

INTRODUCTION

1. The Commission forwarded to the Council on 19 November 1998 a proposal for a Directive of the
European Parliament and of the Council concerning the distance marketing of consumer financial
services and amending Council Directives 90/619/EEC, 97/7/EC and 98/27/EC.

The European Parliament gave its opinion at first reading on 5 May 1999.

The Economic and Social Committee gave its opinion on 29 April 1999.

The Committee of the Regions decided not to give an opinion.

2. The Commission forwarded its amended proposal to Council on 23 July 1999.

3. The Council, on 19 December 2001, adopted its Common Position in accordance with Article . . .

II. OBJECTIVE

The purpose of the Directive is to set a legal framework for the distance marketing of consumer
financial services that promotes the functioning of the internal market and establishes at the same time
a high level of consumer protection. In doing so it complements the existing sectoral provisions on
financial services and,
fills a vacuum left by the general Directive on the distance
marketing of consumer goods.

in particular,

III. ANALYSIS OF THE COMMON POSITION

The Common Position achieved after long and very difficult discussion represents a careful and very
sensitive balance of concerns and interests with the result of:

(cid:151) a high level of harmonisation of information requirements in Article 3,

(cid:151) the possibility for Member States of maintaining or introducing more stringent

information
in conformity with Community law, ensuring at the same time a maximum of

requirements,
transparency,

(cid:151) a very far-reaching harmonisation of the right of withdrawal, payment of the service, unsolicited

services, unsolicited communications, redress, etc.,

(cid:151) providing for the possibility of amending or further harmonising the provisions of the Directive in

the light of experience gained,

(cid:151) clarifying the relation of this Directive to the e-Commerce Directive.

A. EUROPEAN PARLIAMENT’S AMENDMENTS

1. Amendments accepted by the Council

The Council incorporated in the Common Position, in full, partly or in principle, the following
amendments:

Amendment 2 (improve the wording of recital 3): taken over with a slight redrafting,

Amendment 3 (improve the wording of recital 5): taken over with a slight redrafting,

Amendment 4 (no reduction in consumer protection): accepted in recital 8,

Amendment 7 (delete mentioning that some measures are sufficient): accepted in recital 36,

Amendment 10 (modify recital 16): accepted in part in recital 21,

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Amendments 11 and 18 (regarding recitals on right of withdrawal): taken account of in recital 24
and Article 6,

Amendment 12 (delete recital 18): accepted,

Amendment 13 (refer to services): accepted in recital 25,

Amendment 14 (add new recital): accepted in recital 23,

Amendment 43 (delete last part of Article 1(2)): accepted,

Amendment 45 (delete mention of organised systems): accepted in Article 2(a),

Amendment 19 (delete reference to residence): accepted in Article 2(d),

Amendment 21 (prior information):

The Council accepted to a large extent in Article 3(1) and (2), added a number of supplementary
issues and restructured the provision for reasons of clarity. Paragraph 4 of this Article added an
important provision on the coherence between the information in the precontractual phase and
the presumed applicable law (see Article 3(4) below),

Amendments 38, 39, 22, 48, 49 and 50 as well as 11 (right of withdrawal): Accepted to a large
extent in Article 6 with cross references in Article 3(1)(3a) and (3)(b), last indent, and recital 24
(see also Article 6 below),

Amendment 23 (payment of service): accepted with changes of the wording in Article 7,

Amendment 20 (durable medium): accepted in principle in recital 20 as well as in Articles 2(f) and
5(1),

Amendment 27 (unsolicited services): accepted in part in Article 9.

2. Amendments rejected by the Council

Amendment 57 (add a new paragraph 1a to Article 1) and Amendments 40 and 44 (add a new
paragraph 20 to Article 1). The Council felt like the Commission that this would weaken
consumer protection.

Amendment 25 (incomplete services): rejected as the issue is in practice irrelevant,

Amendment 26 (send back documents to the supplier): rejected because considered inappropriate
in practice.

B. NEW PROVISIONS OR ELEMENTS INTRODUCED BY THE COUNCIL

Recitals

Recital 6: clarification regarding the e-Commerce Directive.

Recital 7: clarification regarding sectoral directives and non-harmonised elements.

Recital 8: clarification regarding international private law.

Recital 9: clarification regarding further harmonisation and consumer protection.

Recital 17: clarification regarding initial service agreements.

Recital 20: clarification regarding durable mediums.

Recital 22: clarification regarding information requirements.

Recital 24: reference to the situation where the consumer has expressly required the performance of
the contract.

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Recital 29: reference to non-profit organisations.

Recital 30: clarification regarding Member States, such as D and A, the legal systems of which
include the concept of (cid:145)invitatio ad referendum(cid:146).

Recital 31: clarification regarding the choice of language.

Article 1(2)

This text modifying the Commission proposal makes the subject of initial and successive services
and operations much clearer.

Article 2(b)

Changed in the spirit of the European Parliament’s amendment.

Article 3(3)

Necessary adoption of information requirements to voice telephony.

Article 3(4)

regarding pre-contractual
Necessary clarification to ensure transparency for
information about contractual obligations. The law applicable to the contract at this stage can, in
the view of the Council, only be the one presumed by the provider as being applicable. In case of
conflict, the rules of international private law have to determine the applicable law.

the consumer

Article 4

This Article allows Member States to maintain or introduce a higher level of consumer protection
and given the conditions to be respected (paragraph 1, paragraph 2, last part, paragraphs 3 and 4).

Article 5

The obligations for the supplier regarding the communication of
conditions have been rendered more stringent and more effective.

the contractual

terms and

Article 6

This Article determines the right of withdrawal in a comprehensive, precise and, at the same time,
flexible way, taking account of existing Community legislation, specific situations in Member States
and the particularities of certain financial services.

Article 7

This text on payment of services has been restructured and in some respects clarified and completed
(in particular paragraph 5).

Article 11

The Council preferred a separate provision on sanctions with wording following precedents in other
directives.

Article 16

This Article on transitional measures is designed to cover the period until the transposition of this
Directive.