Recent regulatory developments of interest to financial institutions with focus on consumer finance. See also our Related Materials links for updates with broader application.
The European Commission has updated its webpage on coordinated actions relating to consumer rights to announce that, together with the EU and EEA national consumer enforcement authorities, the Commission has written to three major credit card companies about issues with recurring subscription payments.
The Commission notes that recent research shows that as many as one in 12 EU and UK consumers has ordered a cheap product or service online, only to find out later there is a costly monthly subscription. Common cases involve mobile phones and beauty products sold online. Some of the main causes of this is hidden or small print about recurring payments and only information about a one-off payment amount, not the recurring subscription amount, in the payment window where the consumer enters their credit card information.
While credit card companies are not the ones running these schemes, the Commission reminds the credit card companies that they have a duty to properly inform their customers. Under the Payment Services Directive and the Unfair Commercial Practices Directive, consumers must be made aware of the specific amount for payment transactions and they must not be misled. The Commission therefore has asked the credit card companies to present all necessary information in the payment window for the consumer when they make a payment involving recurring subscription fees.
In a related press release, the Commission states that the three credit card companies now have two months to inform it and the network of national consumer authorities about the positive changes they intend to make to their existing payment processes.
Authored by Yvonne Clapham
Download the full bulletin of regulatory news for financial institutions, 28 June 2021
Financial institutions general regulatory news, 28 June 2021
Banking and finance regulatory news, 28 June 2021
Funds and asset management regulatory news, 28 June 2021
Insurance regulatory news, 28 June 2021
Securities and markets regulatory news, 28 June 2021
Payments regulatory news, 28 June 2021
Are you sure want to delete comment ?
Scan this QR Code to share this content
