§4.4.3 Issues specific to financial services

Since a robust set of EU sector-specific legislation exists in this sector, the ‘safety net’ character of the UCPD is particularly apparent here (435). Financial services are defined by Directive 2002/65/EC of the European Parliament and of the Council (436) as ‘any service of a banking, credit, insurance, personal pension, investment or payment nature’ (437). Several types of sector-specific EU legislation are of relevance for consumer protection in relation to financial services. Examples would be: — Directive 2014/65/EU on markets in financial instruments (MiFID 2); — Directive (EU) 2015/2366 on payment services; — Directive 2008/48/EC on credit agreements for consumers; — Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property; — Directive 2014/92/EU on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features; — Directive (EU) 2016/97 on insurance distribution; — Regulation (EU) 2015/751 of the European Parliament and of the Council (438) on interchange fees for card-based payment transactions; — Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs). Financial service products are often difficult to understand and can involve significant economic risks, so traders should take particular care to act with the standard of skill and care which can reasonably be expected from a professional within this field of commercial activity cf. Article 5(2)(a) UCPD. For example: Under Article 5(6) of the Consumer Credit Directive, creditors and, where applicable credit intermediaries should provide adequate explanations to consumers in order to place the consumer in a position enabling them to assess whether the proposed credit agreement is adapted to their needs and to their financial situation, where appropriate by explaining the pre-contractual information to be provided in accordance with Article 5(1) of the Consumer Credit Directive, the essential characteristics of the products proposed and the specific effects they may have on the consumer, including the consequences of default in payment by the consumer. Traders should also not engage in misleading practices as set out in Articles 6 and 7 UCPD, such as: — lack of information in advertising on the annual percentage rate of charge (APR) and the cost of credit; — offers of misleading bargains for credit contracts with a low interest rate; — lack of proper information on the legal obligations related to the signing of contracts. For example: — Traders should not exaggerate economic benefits, not omit information about financial risks to consumer and not over-rely on past performance on the financial product. — The main characteristics of a financial product under Articles 6(1)(b) and 7(4)(a) could include information that a financial product will be calculated in a currency which is not that of the country where the contract is concluded (439) — Under Article 6(1)(d) and 7(4)(c), the presentation and calculation of fees and charges should include all costs incurred by the consumers, for example by including costs of the service related to fees for agents or intermediaries, or in relation to overdraft charges. The presentation and calculation of fees and charges should also clearly state that a specific low interest rate and/or charge is only applicable for a limited period of time. Articles 8 and 9 set out criteria for assessing aggressive commercial practices. In particular, point No 27 of Annex I to the Directive refers to an aggressive commercial practice in the field of financial services and therefore must be considered unfair in all circumstances: No 27 of ANNEX I ‘Requiring a consumer who wishes to claim on an insurance policy to produce documents which could not reasonably be considered relevant as to whether the claim was valid, or failing systematically to respond to pertinent correspondence, in order to dissuade a consumer from exercising his contractual rights.’ For example: — In some circumstances, obstacles to switching (440) may be considered an aggressive commercial practice and therefore unfair on the basis of Article 9(d) (441). — In the insurance sector, point No 27 Annex I has been applied to situations where insurers refused to pay claims by compelling consumers who wanted to apply for compensation under an insurance policy to produce documents which could not be reasonably considered relevant to establish the validity of the request. In those cases, the traders systematically failed to respond to pertinent correspondence in order to dissuade consumers from exercising their contractual rights. National authorities have extensively applied the UCPD in the field of financial services. For example: A national authority took legal action against certain banks for providing misleading information on the risks inherent in certain financial products, namely Lehman Brothers’ bonds (442). When determining whether such practices were misleading, the authority took into account the fact that the consumers targeted by the banks for the sale of these bonds were ordinary current account holders not being familiar with these types of financial products.

← 4.4.2 · All articles · sec_annex →

Source: EUR-Lex (Cellar) · retrieved 2026-09-07