Sweden bids to win distance-selling deal

Date: 24/05/01

By Peter Chapman

THE Swedish presidency is warning that an effort by member states to protect consumers who buy financial services over the phone, fax or Internet could backfire.

Stockholm is struggling to thrash out an accord before next week's internal market ministers meeting on draft rules for firms offering 'distance selling' of bank loans, securities and insurance. Currently it is pushing a compromise deal that would require a minimum level of information companies must offer to would-be clients.

But insiders say France, Spain, Portugal, Italy and Belgium are insisting on the right to impose tougher domestic consumer protection rules "for a few years" on both local and foreign firms, pending a review of the EU-wide directive.

The Swedes say that by blocking the measure these countries risk weakening existing laws.

Supporters of the new rules claim the right to impose tougher restrictions would go against an existing directive on e-commerce, that says countries should not require extra regulations on companies selling goods and services over the web beyond those in the their 'country of origin'.

But opponents complain they would not have signed up to the e-commerce code had they known it would keep them from enacting tough consumer protection measures in financial services.

The Swedish presidency is warning that an effort by Member States to protect consumers who buy financial services over the phone, fax or Internet could backfire.