Explanatory Memorandum to COM(2022)204 - Amendment of Directive 2011/83/EU concerning financial services contracts concluded at a distance

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This page contains a limited version of this dossier in the EU Monitor.

dossier COM(2022)204 - Amendment of Directive 2011/83/EU concerning financial services contracts concluded at a distance.
source COM(2022)204 EN
date 11-05-2022


1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

Directive 2002/65/EC on Distance Marketing of Consumer Financial Services (the Directive or the DMFSD) aims to ensure the free movement of financial services in the single market by harmonising certain consumer protection rules in this area, and to ensure a high level of consumer protection. In so far as there is no EU product-specific legislation or no EU horizontal rules covering the particular consumer financial service, the Directive applies horizontally to any present or future service of a banking, credit, insurance, personal pension, investment or payment nature contracted by means of distance communication (i.e. without the simultaneous physical presence of the trader and the consumer). The Directive sets out information to be provided to the consumer prior to the conclusion of the distance contract (pre-contractual information), grants for certain financial services a right of withdrawal to the consumer and establishes rules on unsolicited services and unsolicited communication.

The Directive has been subject to a Regulatory Fitness (REFIT) Review Evaluation and the Commission has presented its results in a Staff Working Document 1 . The main results of the evaluation can be distilled into two overarching conclusions. The first of these is that, following the entry into application of the Directive, a number of EU product-specific legislative acts (such as e.g. the Consumer Credit Directive 2 or the Mortgage Credit Directive 3 ) and EU horizontal legislation (such as e.g. the General Data Protection Regulation 4 ) have been enacted, which cover aspects of consumer’s rights with regard to financial services that are also covered by the Directive. The impact of such recently enacted legislation is that the Directive’s relevance and added value has subsequently decreased. The second conclusion is that nonetheless, the Evaluation highlighted that the Directive is still relevant in a number of areas (e.g. for certain expensive investments, such as diamonds, the provisions on the right to pre-contractual information continue to apply). The evaluation highlighted that the safety net feature ensured that consumers had a certain level of protection for contracts concluded at a distance even in the case of financial products that were not as yet subject to any EU legislation (e.g. in the absence of EU rules on crypto-assets, the Directive applies) The evaluation also pointed out that a number of developments such as the increasing digitalisation of services have affected the Directive’s effectiveness in reaching its principal objectives of ensuring a high level of consumer protection and fostering the cross-border conclusion of financial services sold at a distance.

Alongside the Commission’s various political and legislative actions, over the past 20 years the distance marketing of consumer financial services has changed rapidly. Financial services providers and consumers have abandoned the fax machine, mentioned in the Directive, and new players (such as fintech companies) with new business models and new distribution channels (e.g. financial services sold online) have emerged. Consumers are willing to use digital tools in this context and are purchasing financial products and services online, leading established players to adapt their marketing and business practices. The COVID-19 pandemic and the resulting lockdowns have also accelerated the use of online shopping in general. In this regard, the Directive has also played a role in ensuring the provision of financial services while at the same time ensuring a high level of consumer protection, for instance in the banking sector, in particular for digital on-boarding purposes 5 . Lockdowns during the pandemic meant that physical meetings in banks between consumers and providers were kept to a minimum. As a result, the digital on-boarding of potential clients took place on a more regular basis. In such cases, financial services providers, when seeking the views of the relevant competent authorities, applied the rules of the Directive since the contract was being concluded ‘at a distance’ (i.e without the simultaneous physical presence of the provider of the financial service and the consumer). Given the evaluation’s outcome, the Commission has listed the Directive for a REFIT Review in the 2020 Commission Work Programme 6 . To this end, the Commission carried out an Impact Assessment in 2021, building on the above-mentioned evaluation. The outcome of the Impact Assessment is the Legislative Proposal below.

The Proposal aims to simplify and modernise the legislative framework by repealing the existing DMFSD while including relevant aspects of consumer rights regarding financial services contracts concluded at a distance within the scope of the horizontally applicable Consumer Rights Directive.

The overall objective of the legislation remains unchanged: to promote the provision of financial services in the internal market while ensuring a high level of consumer protection. This objective is obtained in five distinct ways:

–Full harmonisation: The same high level of consumer protection across the single market is best ensured through full harmonisation. Harmonisation means the rules will be similar for all financial service providers and consumers will be guaranteed the same rights in all EU Member States.

–Pre-contractual information: Receiving key information in a timely manner and in a clear and comprehensible way, whether electronically or on paper, ensures the necessary transparency and empowers the consumer. In this regard, the proposal aims at regulating what, how and when pre-contractual information is to be provided. Concretely, the rules are modernised in that certain details not mentioned in Directive 2002/65/EC, such as the provision of the email address by the financial service provider, have been added. The proposal also regulates how the information is to be provided with regard to electronic communication. The proposal sets out rules when the information is to be provided so consumers are given sufficient time to understand the pre-contractual information received and be able to digest it before actually concluding the contract.

–Right of withdrawal: The right of withdrawal is a basic consumer right. It is particularly important in the area of financial services since certain products and services are complex and might be difficult to understand. This right has been strengthened in two specific ways: first, a withdrawal button is to be provided by the trader when the consumer concludes, by electronic means, a financial services contract at a distance. In this manner, it becomes easier for the consumer to exercise this right; second, and linked to when the pre-contractual information is to be provided, a notification of the right of withdrawal will be provided by the trader in case the pre-contractual information is received less than a day from the conclusion of the contract.

–Online fairness: financial service contracts are increasingly concluded by electronic means. This is why, to ensure a high level of consumer protection, the proposal sets out special rules to protect consumers when concluding contracts for financial services by electronic means. First, it establishes rules concerning adequate explanations that take place at a distance, including via online tools (e.g. roboadvice or chat boxes). The rules establish the information requirements that the trader is to provide the consumer with and the possibility for the consumer, if online tools are used, to request human intervention. Therefore, the consumer should always have the possibility to interact with a human being representing the trader. The proposal also aims to ensure that traders do not benefit from consumer biases. In this light, they are prohibited from setting up their online interfaces in a way which can distort or impair the consumers’ ability to make a free, autonomous and informed decision or choice.

–Enforcement: The proposal also strengthens the rules on the enforcement with regard to the provision of financial services: it extends the rules on enforcement and penalties currently applicable in Directive 2011/83/EU on consumer rights (‘the Consumer Rights Directive’) to financial services contracts concluded at a distance, including the amendments introduced by the Better enforcement and modernisation Directive (EU) 2019/2161 concerning penalties in the case of cross-border widespread infringements.

• Consistency with existing policy provisions in the policy area

Directive 2002/65/EU and Directive 2011/83/EU share a number of similarities. They both provide consumers with basic consumer rights, such as the right of withdrawal and the right to obtain pre-contractual information. They both regulate contracts concluded at a distance and both apply horizontally, serving as general legislation. However, currently Directive 2011/83/EU excludes all financial services from its scope. The purpose of this proposal is to end the overall exclusion of financial services from Directive 2011/83/EU by broadening its scope to include financial services concluded at a distance. This means that a number of articles from the current Directive 2011/83/EU will be applied to financial services sold at a distance. A dedicated chapter on distance contracts for consumer financial services will be included in Directive 2011/83/EU. In this way, the Proposal ensures consistency with existing policy provisions both in the areas of consumer protection and financial services.

This proposal ensures consistency with current rules in the area of financial services. This is because the relationship between the two areas is regulated by the principle whereby, if any provision of this Directive conflicts with a provision of another Union act governing specific sectors, the provision of that other Union act shall prevail and shall apply to those specific sectors. Special attention has been dedicated to ensure that the overlaps between product-specific legislation and this Proposal are clearly demarcated, in particular with regard to the right to pre-contractual information, the right of withdrawal and adequate explanations.

This proposal is consistent with the current horizontal rules concerning consumer rights beyond Directive 2011/83/EU, including Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market and Directive 2006/114/EC concerning misleading and comparative advertising which already apply to financial services.

• Consistency with other Union policies

The objectives of the proposal are consistent with the EU’s policies and objectives.

The proposal is consistent with and complementary to other EU legislation and policies, particularly in the areas of consumer protection and financial services.

The Commission recognises the significant impact of the digital transition on everyday life and has included the need for a Europe fit for the digital age among its headline ambitions. In September 2020, the Commission adopted the Capital Markets Union (CMU) Action Plan and a Digital finance package , including a Digital finance strategy and legislative proposals on crypto-assets and digital resilience, for a competitive EU financial sector that gives consumers access to innovative financial products while ensuring consumer protection and financial stability. The CMU Action Plan consists of a number of actions, including a specific action on increasing trust in the capital markets. In this regard, the proposal takes into consideration these recent initiatives and aims to modernise the rules while also increasing consumer trust.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

Consumer protection falls within the joint remit (shared competence) of the EU and EU Member States. As Article 169 of the Treaty on the Functioning of the EU (TFEU) states, the EU must help protect the economic interests of consumers and promote their right to information and education, to safeguard their interests. This proposal is based on Article 114 TFEU. This is, in accordance with Article 169(2)(a) TFEU, the legal basis for adopting measures that contribute to the achievement of Article 169 TFEU objectives in the context of the completion of the single market.

• Subsidiarity (for non-exclusive competence)

The subsidiarity principle applies insofar as the proposal does not fall under the exclusive competence of the Union.

With digitalisation, and the potential entry into the financial market of new digital players, the cross-border provision of financial services is expected to increase. As a result, common EU rules fit for the digital age will be both more necessary and more effective in achieving EU policy objectives. This is why horizontal rules regulating current and future financial services can only be set by means of an EU act.

The objectives of the proposed action cannot be sufficiently achieved by Member States and can therefore, by reason of the scale or effects of the proposed action, be better achieved by the Union. The Treaty provides for action to ensure the establishment and functioning of a single market with a high level of consumer protection and the free provision of services.

• Proportionality

In line with the proportionality principle, the proposal does not go beyond what is strictly necessary to achieve its objectives.

The proposed rules would entail some costs for suppliers but not going beyond what would be considered acceptable in the context of an ambitious and future-proof approach leading to higher benefits for consumers, suppliers and the broader society.

• Choice of the instrument

Directive 2002/65/EC will be repealed and a number of provisions concerning consumer financial services concluded at a distance will be introduced into Directive 2011/83/EU. This will enable Member States to amend the legislation in force to the extent that is needed to ensure compliance.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

In 2006 the Commission presented a report on the implementation of Directive 2002/65/EC. In that report the Commission concluded that it was not in a position to meet the requirements of Article 20 (1) of the Directive due to Member States being late in transposing the Directive and informed the co-legislators that another report would be presented at a later stage. In 2009, the Commission presented a report as laid down in Article 20(1) of the Directive.

In the 2017 EC Consumer Financial Services Action Plan , the Commission undertook to assess whether the distance selling market of retail financial services was still fit for purpose in order to identify the potential consumer risks and business opportunities in this market and, on that basis, decide on the need to amend distance-selling requirements. A behavioural study published in 2019 looked how consumer behaviours were impacted by techniques used online by retail financial services providers at the advertising and pre-contractual stages. On the basis of the 2019 Work Programme , the Commission launched a fully-fledged Evaluation of the Directive. The evaluation was published in November 2020.

The 2020 Staff Working Document revealed that Directive 2002/65/EC has been partially effective in increasing consumer protection and of limited effectiveness in contributing to consolidate the single market due to internal and external barriers. It concluded that the Directive still had an EU added value and that the objectives laid down in Article 1 of the Directive were still relevant. However, digitalisation exacerbated some aspects not fully addressed by the Directive, including how and when information should be provided. The 2020 Staff Working Document also concluded that the progressive introduction of EU product-specific legislation, such as Directive 2008/48/EU 7 , Directive 2014/17 8 , Directive 2014/92 9 , and EU horizontal legislation, such as Regulation 2016/679 10 , enacted after the entry into force of the Directive has led to significant overlaps, thereby creating legal and practical difficulties.

The Commission’s 2020 Work Programme lists this Directive under the REFIT initiatives as subject to a possible revision.

• Stakeholder consultations

In the last few years, the Commission has undertaken several consultation activities on rules applicable to consumer financial services concluded at a distance at EU level. Stakeholders were consulted for the REFIT Evaluation, whose results were published in 2020 and for the impact assessment conducted for the Directive’s REFIT Review. As part of the REFIT Evaluation and REFIT Review, two public consultations have been carried out in addition to other consultation strands (consumer surveys, stakeholder interviews and surveys, targeted questionnaires aimed at national authorities, bilateral meetings, workshops, Member State dedicated expert group meetings).

The extensive consultation process made it possible to identify key issues. Stakeholders’ feedback pointed to the digitalisation of the market and the increasing number of recent product-specific legislation as the main drivers to be considered in the review process.

Respondents across all stakeholder groups and EU Member States agree that there is a need to improve the rule regulating overlapping provisions between the Directive and the product-specific legislation. Consumer organisation favour an extensive revision of the Directive, for instance by increasing the scope to introduce rules on advertisement. Business representatives are in favour either of maintaining the status quo or repealing Directive 2002/65/EC, so long as the horizontal nature of the Directive remains. Member States generally support any type of legislative amendment so long as the horizontal nature of the Directive is kept. National authorities would support more robust provisions concerning enforcement while preserving the horizontal nature of the Directive.

The input received was summarised and used to prepare the impact assessment accompanying the proposal, as well as to assess the impact of new rules on stakeholders.

• Collection and use of expertise

The Commission also drew on a series of studies and reports undertaken on issues relating to consumer financial services, including: the study by Tetra Report supporting the Directive’s Impact Assessment (2021); 11 the ICF study supporting the Evaluation of the DMFSD (2020); 12 the behavioural study by LE Europe et al. on the digitalisation of the marketing and distance selling of retail financial services (2019) 13 . Other studies and reports concerning the DMFSD were also taken into consideration, including the www.eba.europa.eu/sites/default/documents/files%202022%2001%20ESA%20Final%20Report%20on%20Digital%20Finance.pdf">Joint Supervisory Authority response to the European Commission’s February 2021 Call for Advice on digital finance and related issues.

• Impact assessment

The Commission carried out an impact assessment.

The impact assessment gathered information about and analysed the Directive’s coherence with other overlapping EU legislation. To do so, a mapping exercise of the relevant EU product and EU specific legislation was conducted to see whether all the relevant parts of the Directive have been taken over by the more recent EU legislation. The initiative looked into whether the Directive could be safely repealed without creating any legal lacunae and without lowering the level of consumer protection, whilst ensuring the fostering of the single market for cross-border sale of financial products and services sold at a distance. The conclusion arrived at was that the simple repeal of the Directive would lead to the lowering of consumer protection. This is because for certain financial services for which EU legislation is already in force, a number of provisions of the Directive apply (for instance, the right of withdrawal for certain insurances or the right to pre-contractual information for gift cards in the area of payment services).

As a second step, after analysing the coherence of the Directive, the aim was to consider whether the residual ‘legally relevant’ parts of the Directive are still practically relevant (effective) for the stakeholders. In other words, the aim of this second step was to see whether the still relevant elements of the Directive (for instance, the right of withdrawal in the area of insurances) played a significant role protecting consumers and consolidating the single market, especially in the context of digitalisation.

As part of this second step, the Directive’s safety net feature was also analysed. The safety net means that the Directive’s rules apply whenever (i) a new product appears on the market for which there is no EU legislation yet (e.g. virtual currencies are a financial service product not yet subject to legislation at EU level), (ii) the product-specific legislation does not provide the right(s) established by the Directive (e.g. the right for the consumer to withdraw from the contract within an established time-period is not laid down in the relevant insurance legislations), (iii) the product-specific legislation creates exemptions and the product falls outside the scope of application (e.g. consumer credit loans below EUR 200 are not covered by Directive 2008/48/EC - Consumer Credit Directive).

The conclusion reached was that the Member States have applied the safety net in various circumstances and financial services areas, such as the area of investment in expensive wines and diamonds; in this instance, the Directive’s provisions on pre-contractual information were signalled as the applicable law. Other instances concern certain gift cards outside the scope of the Payment Services Directive II or the instance cited above of digital on-boarding during the COVID-19 pandemic. Instances of the importance of the safety net have also been recorded in judicial matters, with a national court applying certain provisions of the Directive (the rules on pre-contractual information) to cryptocurrencies.

The options assessed to achieve the objectives identified for the Initiative were: a no policy change scenario (Option 0 - baseline), Repeal of the Directive and non-regulatory measures (Option 1); Comprehensive revision (Option 2); Repeal, modernisation of relevant provisions introduced in a horizontal legislation (Option 3a); or Repeal, modernisation of relevant provisions introduced in the product specific legislation (Option 3b).

The preferred option, based on the data obtained and outcome of the respective scoring system, is Option 3a, namely to repeal Directive 2002/65/EC, modernise and then inject the still relevant articles (right to pre-contractual information and right of withdrawal) into Directive 2011/83/EU, extend the application of certain rules of Directive 2011/83/EU to consumer financial services concluded at a distance (e.g. rules on additional payments and rules on enforcement and penalties) and introduce targeted new provisions to ensure online fairness when consumers conclude financial services. This option tackles the identified problems and addresses the objectives in the most effective, efficient and proportionate way. Moreover, it ensures a high level of coherence.

Contents

1.

The proposed legal intervention makes the current DMFSD framework fit for purpose by repealing the provisions that are no longer relevant. All this is achieved through five distinct actions:


(i)ensuring full harmonisation for the rules covering consumer financial services concluded at a distance;

2.

(ii) laying down rules on what, when and how pre-contractual information is to be provided, thereby rendering these rules fit for the digital age;


(iii)making it easier, when financial services contracts are concluded by electronic means, to exercise the right of withdrawal through a withdrawal button, and ensuring that consumers who have had less than 1 day to digest the pre-contractual information are reminded about the right of withdrawal after the conclusion of the contract;

(iv)introducing two articles to ensure online fairness;

(v)strengthening the rules on enforcing the provisions on consumer financial services concluded at a distance.

This way, this legal revision ensures a high level of consumer protection, makes the relevant rights fit for the digital age, and safeguards, as requested by all stakeholders, the safety net feature for possible future emerging products.

This preferred option will lead to the repeal of the current legislation without the creation of a new legal instrument. Directive 2011/83/EU was chosen as the appropriate instrument since, similar to the DMFSD, it provides horizontal consumer rights and rules. Thus, introducing the DMFSD relevant rights into Directive 2011/83/EU ensures that the safety net feature is safeguarded. As of today, Directive 2011/83/EU, excludes from its scope ‘financial services’ altogether. However, it already provides for the right to pre-contractual information and the right of withdrawal for other contracts concluded at a distance.

Special care has been taken, on the one hand, to ensure the required specificity of financial services, and on the other hand, to ensure that Directive 2011/83/EU is not made too complex. The best identified way to proceed is to apply, as far as possible, rules already laid down in Directive 2011/83/EU to financial services (e.g. the provisions on enforcement and penalties) or to build on such rules, thereby creating more specific rules, and place them in the dedicated chapter on financial services contracts concluded at a distance (e.g. the withdrawal button concerning the exercise of the right of withdrawal). This added chapter contains certain new rules (e.g provisions on online fairness) and builds on existing rules found either in Directive 2002/65/EC or in Directive 2011/83/EU. This added chapter will concern only consumer financial services concluded at a distance and will not apply to other contracts regulated by the Consumer Rights Directive.

The preferred option would also have a positive effect on the reduction of consumer detriment (at least EUR 170-210 million) and on consumer trust. It would entail some costs for financial service providers (at least around EUR 19 million) and public authorities (at least around EUR 6 million).

• Regulatory fitness and simplification

The review of the Directive is included in the Commission Work Programme’s REFIT section. The proposal would entail costs for businesses, but its resulting legal certainty is also expected to reduce the burden on them.

The potential for simplification of the proposed initiative stems mainly from the regulatory approach chosen, namely repealing Directive 2002/65/EC and including a small number of articles in Directive 2011/83/EU. In addition, measures simplifying information requirements and adapting them to digital use and a provision clearly laying down the principle whereby, if two laws govern the same factual situation, a law governing a specific subject matter overrides a law governing only general matters, will also help simplify matters for businesses when concluding financial services at a distance.

As regards reduced burden for public administrations, the higher degree of legal clarity and the simplified regulatory framework is expected to reduce the number of complaints and increasing the level of certainty and compliance, which would render enforcement procedures more efficient. Specific measures to reinforce coordination and improve conditions for enforcement are also expected to result in efficiency gains in relation to the enforcement of the Directive’s obligations.

Specific impacts on SMEs have not been identified to be significant.

• Fundamental rights

This proposal respects fundamental rights and observes the principles recognised in particular in the Charter of Fundamental Rights of the European Union. In particular, it seeks to ensure full respect for the rules on the protection of personal data, the right to property, non-discrimination, the protection of family and professional life, and consumer protection.

4. BUDGETARY IMPLICATIONS

This proposal has no implications for the EU’s or agencies’ budget, leaving aside the normal administrative costs of ensuring compliance with EU legislation, since no new committees are being created and no financial commitments being made.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

The Commission will monitor the implementation of the revised Directive, if adopted, after its entry into force. The Commission will mainly be in charge of monitoring the Directive’s impact, based on the data Member State authorities and financial service providers provide, which will be based on existing data sources where possible, to avoid imposing additional burdens on the various stakeholders.

• Explanatory documents (for directives)

As the proposal introduces specific amendments to an existing directive, Member States should either provide the Commission with the text of the specific amendments to national rules or, in the absence of such amendments, explain which specific national law provision already implements the amendments provided in the proposal.

• Detailed explanation of the specific provisions of the proposal

Article 1 – Amendments to Directive 2011/83/EU

3.

Article 1 of the proposal amends Directive 2011/83/EC in different ways:


Article 1 paragraphs (1)(a) & (b) of the proposal amends Article 3 of Directive 2011/83/EU in three instances: first, it introduces a new paragraph in Directive 2011/83/EC (‘Article 3(1b)’). The proposed new Article 3(1b) contains references to articles of the current Directive 2011/83/EU which shall apply directly to financial services contracts concluded at a distance and also lists the articles which will constitute the chapter on financial services concluded at a distances. In this regard, the rules of Directive 2011/83/EU concerning (i) Subject Matter – Article 1; (ii) Definitions – Article 2; (iii) Level of harmonisation; (iv) fees for the use of means of payment – Article 19, (ii) additional payment –Article 22; (iv) enforcement and penalties – Article 23 & 24; (v) Imperative Nature of the Directive – Article 25; (vi) Information – Article 26 – are extended to consumer financial services contracts concluded at a distance. Therefore, in this manner, the current rules of Directive 2011/83/EU in these areas are extended to financial services contracts concluded between a trader and a consumer at a distance. This will ensure that those financial services contracts will be subject to similar rules as other sales and services contracts and thereby ensuring a high level of consumer protection while at the same time fostering the provision of such services within the internal market. The extension of the rules on enforcement and penalties will ensure that national supervisory authorities shall be equipped with new rules to ensure effective, proportionate and dissuasive penalties. Second, current paragraphs of Directive 2002/65/EC concerning the ‘objective and scope’ (Article 1 of Directive 2002/65/EC) shall be included in proposed Article 3(1b) of Directive 2011/83/EC. Third, to ensure legal certainty, the proposal suggests to amend Article 3(3)(d) of Directive 2011/83/EC.

Article 1(2) of the proposal introduces in Directive 2011/83/EU a Chapter concerning consumer financial services contracts concluded at a distance. This Chapter applies only to financial services contracts concluded at a distance. It combines the relevant articles of Directive 2002/65/EC, namely the right to pre-contractual information and the right to withdrawal and introduces two new articles (‘Adequate Explanations’, ‘Additional protection regarding online interfaces’).

(a)The provision on the right to pre-contractual information follows the same structure as laid down in Directive 2002/65/EC. However, Article 1 of the proposal modernises the provision on the right to pre-contractual and renders it fit for the digital age by addressing which information needs to reach the consumer (for instance, the inclusion of the need for the trader to provide an email address); how the information needs to reach the consumer (for instance, when layering of information can be used and which information requirements need to be specified); and when the information should reach the consumer, namely, setting the norm that the information should reach the consumer at least a day before the actual signature.

(b)The rules concerning the right of withdrawal for financial services contracts concluded at a distance are largely the ones laid down in Directive 2002/65/EC. However, in line with the Proposal for a Directive on consumer credit 14 , rules on when the information should reach the consumer have been added. Thus, in case the time period between the provision of the pre-contractual information and the actual conclusion of the contract is less than one day, the trader providing the financial service at a distance is obliged to provide a notification after the conclusion of the contract to remind the consumer of the possibility to exercise his right of withdrawal. Another instance of how this right is being enhanced in the digital sphere is by including an obligation on the financial service trader to provide for a withdrawal button. This should facilitate the exercise of the right of withdrawal, in case the consumer concludes the financial services contract through electronic means and would like to withdraw within the necessary time-frame.

(c)Two articles intended to improve online fairness when consumer financial services are bought have been introduced in the Chapter of this Proposal: (i) when a trader provides adequate explanations, inter alia, by using online tools, such as roboadvice or chat boxes, the trader has to provide and explain to the consumer the key information, including information on the main characteristics of the proposed financial service contract. In addition, if the consumer so requests, he may ask for human intervention, thus ensuring the possibility for the consumer to interact with a human being representing the trader; (ii) the rule on additional protection regarding online interfaces prohibit the trader from deploying measures in his or her online interface that could distort or impair the consumers’ ability to make a free, autonomous and informed decision or choice. The aim of this provision is to avoid as far as possible consumer biases and increase transparency.

The rest of the articles in this proposal are standard provisions concerning, respectively, the transposition, entry into force and addressees of this proposal.