Thursday, 27 January 2011

Swedish dilemma

The European Commission referred Sweden to the European Court of Justice for inadequate transpotition of the Directive 2002/65/EC on the distance marketing of consumer financial services. This Directive offers consumers similar level of protection as the Distance Selling Directive, however, it applies to the marketing and sale of financial services (and not goods) via means of distance communication, e.g. when a consumer takes a loan from a bank via telephone, or signs up for a credit card online.

Sweden infringed consumer rights by e.g. leaving an option open to the service providers to require from consumers who are trying to use their right of withdrawal a compensation for costs associated with screening before consumers are granted a loan. According to Article 7 of this Directive consumers using a right of withdrawal may only be required to pay for services provided to them directly.

Since Sweden did not timely amend its legislation after first being notified by the European Commission of its infringement, the matter will now be directed to the ECJ. The reference procedure is one of the most important elements in protecting indvidual rights and insisting on adequate remedies for consumers that European Commission may use. The EC does not make use of it too hastly, but sometimes the national legislative authorities are just too slow in giving their citizens the necessary (European) standard of protection.

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