European Commission refers Sweden to court over distance marketing of consumer financial services

European Commission refers Sweden to court over distance marketing of consumer financial services

2011-01-28 05:29:26 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- European Commission on Thursday decided to refer Sweden to court over the distance marketing of consumer financial services into their national law.

The Commission considered that Sweden failed to sufficiently protect consumers' due to the inadequate transposition of Directive 2002/65/EC on consumer financial services.

The case was referred to the Court of Justice of the European Union as Sweden has not communicated concrete draft amendments to its national laws to implement the Directive 2002/65/EC.

The directive grants consumers the right to withdraw from a contract with any service provider within 14 calendar days of its conclusion. Under Swedish law, it is required to pay the service supplier compensation.

This compensation is contrary to the directive as it demands payments for costs associated with screening before granting a loan, among others. The EU directive grants that consumers may be required to compensate a provider only for a service provided to them directly.

On October 8, 2009, the Commission launched an infringement procedure against Sweden over this issue. The Swedish government claimed that the extra costs which may be imposed on consumers are part of the service provided to them.

In June, the Commission reassured its opinion that Sweden was infringing the directive. In response, Sweden announced its intention to amend its law to comply with the EU directive.

However, Sweden has failed to present any draft amendments and a reasonable time-frame for their adoption. As a result, the Commission referred the case to court in order to ensure roper implementation of EU law.

The EU directive was designed to boost consumer confidence in distance marketing techniques and internet transactions across borders. It provide comprehensive information before a contract is concluded and the right to withdraw from the contract during a designated period.

Financial services are sold over the internet or by telephone and represent a contract between a consumer and a bank, a credit card company, an investment fund, an insurance company, or another financial institution.

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