Bid to break deadlock over ‘distance’ sales

Date: 14/10/1999

By Renée Cordes

MEMBER states would be able to impose tough national restrictions on the sale of financial services over the telephone, mail or the Internet under a new Finnish proposal.

Helsinki's plan, which was discussed by national officials for the first time this week, is aimed at overcoming opposition to proposed Union-wide rules to govern the 'distance selling' of financial services.

Under the Commission's original proposal, governments would not be allowed to introduce laws which were more restrictive than those agreed at the EU level. The Commission, supported by MEPs, argues that this is necessary to ensure a single market in banking, insurance and other retail financial services while promoting a high level of consumer confidence.

But the majority of governments insist they will not agree to abandon tougher national legislation, arguing that this is the best way to safeguard consumers' interests.

Finland is anxious to get agreement on the plan before its presidency ends in December and has tabled new proposals which include 'minimum harmonisation' as a general principle but would allow those member states which already have stricter national laws to keep them.

However, diplomats warn that Helsinki will find it hard to convince the Netherlands and the UK, which favour common rules, to support this approach and even more difficult to persuade the Commission to do an about-face.

The institution has already revised its proposal once. The latest version includes a general right to withdraw from contracts. Previously, the Commission had suggested giving borrowers a restricted right of withdrawal, but only in cases where the financial services provider had either unfairly induced the consumer to sign the contract or did not disclose the terms of the deal.