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S&Ds: Consumers' rights to withdraw from financial services becomes a reality

Date

05 Oct 2023

Sections

Global Europe
Today the European Parliament votes on new rules to better protect consumers when concluding distance contracts for financial services.
 
The sale and marketing of credit, insurance, and pension plans, is progressively moving online. These financial service products are often also promoted through online ads and social media, among other channels. The use of new technologies has definitely facilitated the access to financial products. However, in many cases, consumers do not receive the necessary information prior to making any decision or are redirected towards either products they do not wish to sign up for (‘dark patterns’), or unclear financial contracts that are difficult to withdraw from once do they sign.
 
The new rules include several priorities that are key for the Socialists & Democrats Group: a withdrawal button for all distant contracts (not only for financial services) to allow consumers to easily use their right of withdrawal online within the next 14 days since they signed the contract, the right to receive information free of charge and well in advance before concluding a contract online, and a prohibition of ‘dark patterns’ when a financial service is offered online.
 
Maria-Manuel Leitão-Marques, S&D rapporteur on "Financial services contracts concluded at a distance", said:
 
"With this new directive we aim to provide better protection for consumers in the digital environment, especially the most vulnerable ones, faced with unfair practices or "dark patterns" when acquiring credit, insurance, and pension plans online.
 
"We, the Socialists and Democrats believe that the right of withdrawal is crucial for consumers, and should be accessible in a simple way. This is why we have pushed to make sure that a withdrawal button is included in all distant contracts, and not only those of financial services.
 
"We deeply deplored the fact that the right wing political groups refused to regulate the marketing of dangerous financial products by the so-called finfluencers, who promote financial advice or products, and which in the past has caused grave harm to consumers.”
 
Notes to editors:
 
After the adoption of these new rules during the European Parliament plenary session in October, member states will have 24 months to incorporate the new rules into their national laws.
 

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