European Banking Authority publishes recommendations to strengthen disclosure in digital channels

Yesterday, the European Banking Authority (EBA) published a series of recommendations to promote transparency in the marketing of financial services through digital channels (such as the internet or mobile devices). These recommendations are contained in the Opinion of the European Banking Authority on disclosure to consumers of banking services through digital means under Directive 2002/65/EC.

The EBA recommendations relate primarily to the scope and consistency of disclosure rules for digital channels, the timing of disclosure, the presentation format, and accessibility of information. They cover advertisements, pre-contractual information, rights of withdrawal, complaints handling and post sale information.

These recommendations are primarily addressed to the European Commission for consideration in the revision of Directive 2002/65/EC, of 23 September 2002, concerning the distance marketing of consumer financial services. At the same time, however, the EBA also recommends that national competent authorities incorporate these proposals into national initiatives establishing disclosure requirements in the commercialisation of products and services through digital channels.

For instance, the EBA proposes that, when providing a financial product or service, financial institutions should:

• Ensure that the presentation of information, in terms of font size and format, will easily adapt to work on any kind of device, and draw attention to relevant information (e.g. fees and charges) to increase the likelihood that consumers notice and understand it prior to the conclusion of the agreement;

• Guarantee that information is downloadable, so that consumers may store it in their own device for future reference;

• Encourage consumers to read pre-contractual and contractual information, by ensuring that they cannot conclude the contract before scrolling down the entire information to the every end;

• Avoid using pre-ticked boxes, most notably under product bundling;

• Use communication means to assist consumers, such as live chats, FAQs, infographics and interactive tools;

• Ensure that the procedure to exercise the right of withdrawal is not more cumbersome than the procedure to sign the financial product of service contract.

By issuing these recommendations, the EBA delivers one of the priorities set out in its Roadmap on FinTech, published in March 2018, to enhance consumer protection in respect of financial products and services marketed through digital channels.