14 May 2002

EP adopted Council Common Position on Distance Marketing Directive

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The European Parliament approved the Council's Common Position on the Distance Marketing Directive seeking to establish common rules governing the conditions for offering and concluding distance financial service contracts as well as basic rights for consumers.

Parliament followed the recommendation of the rapporteur Maria Berger to approve the legislation with the least possible changes so as to avoid disturbing the delicate agreement reached by Council.

The 38 amendments adopted in Committee in April failed to secure the qualified majority and were replaced by two compromise amendments supported by the Council and the Commission.

The first of these amendments concerns Article 6 (on the right of retraction) and stipulates that Member States may provide that the right of retraction does not apply to “all consumers' declarations before a solicitor, provided consumers' rights under Article 5, paragraph 1, have been respected”.

The second amendment concerns Article 7 (payment for services prior to retraction). This article states that where consumers exercise their right to withdraw from a contract under Article 6, they can only be held liable for payment at the earliest opportunity for the financial service effectively provided under the terms of the contract. The amendment introduced stipulates that “the execution of a contract can only begin with the consumer's consent”.

(Text of adopted amendments see below)

Amendments intended to reinstate Parliament's position from first reading failed to secure the qualified majority needed at second reading.

After the vote it is almost certain that the conciliation procedure will be avoided and the directive adopted shortly.

Mrs. Berger explained in her report that the Council met to an 'unusually high degree' Parliament's demands from first reading. Where again divergence from Parliament's position was unavoidable in order to enable agreement to be reached within the Council, the differences have been kept as small as possible.

The main stumbling block in the negotiations was the issue of maximum or minimum harmonisation regarding to the question if the rules applicable should be clearly defined by Community legislation. In that case Member States would no longer be able to introduce or maintain stricter national rules on consumer protection.

Mrs. Berger believes that the solution now agreed is essentially and in almost all areas based on the principle of maximum harmonisation, thus in accordance with Parliament's amendments from first reading, providing only in a small number of cases for Member States to be able to introduce or maintain national rules.

Commissioner Byrne, confirmed that 'there is full harmonisation in respect of information to consumers prior to the conclusion to the contract on, for instance, the supplier of the financial service, the distance contract and the redress mechanism'.

Commission press release

--------------- Adopted Amendments: ---------------
Distance marketing of consumer financial services ***II

Amendment 43
Article 6, paragraph 3, point (ba) (new)

Council Common Position
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Amendments by Parliament
(ba) delcarations by consumers using the services of an official, provided that the official confirms that the consumer is guaranteed the rights under Article 5(1).

Amendment 44
Article 7, paragraph 1, introduction

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

Amendment by Parliament
1. When the consumer exercises his right of withdrawal under Article 6(1) he may only be required to pay, without any undue delay, for the service actually provided by the supplier in accordance with the contract. The performance of the contract may only begin after the consumer has given his approval. The amount payable shall not:

See original document (pp 40-41)

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