European Commission to make online banking more transparent

Consumer rights in the sale of online financial services including banking or insurance are to get a boost under new proposals from the European Commission (EU) announced in Brussels.

The expansion of the digital financial sector, especially since the COVID-19 pandemic, meant that the “rules of the game” must be updated.

The EU Commission’s Vice-President Vìra Jourová said this in a statement on Wednesday.

Proposals to update current EU rules in place since 2002 involved measures to block hidden costs and frustrate attempts to bury contract terms through multiple pages online.

Measures for specific human interaction options when negotiating contracts online were also proposed in place of the sole use of chat boxes and customer service bots.

The Commission also announced its intention to make it easier for consumers to use their current 14-day right of contract withdrawal with a button displayed prominently on a website.

This change of mind or cooling-off period already applies to purchases in the EU made online or through similar means such as teleshopping away from physical store premises.

Penalties for infringements could be as high as four per cent of annual turnover for companies under commission plans.

The 27 EU member states and the European Parliament are now set to scrutinise the proposals.

EU Economy Commissioner Paolo Gentiloni also proposed changes to tax rules on Wednesday to incentivise businesses to attract investment rather than raise finance through borrowing.

Gentiloni said in a Brussels news conference that the current rules tended to encourage borrowing, whereas the new tax rule, which widens tax-deductible measures to include investments.