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EU to regulate online financial services

Law will control cold-calling and 'inertia selling'

The European Commission welcomed a vote in the European Parliament on Tuesday that paves the way for a new law governing online provision of financial services.

"We need to make sure that the full potential of providing services by phone and internet is realised. This directive is a big step towards those goals," said internal market commissioner Fritz Bolkestein in a statement on Wednesday.

The Commission, the original author of the proposed law, intends it to protect consumers' interests and to help develop a market for cross-border sales of financial services. The law would include articles prohibiting abusive marketing practices that try to force consumers to buy services they have not selected — so-called inertia selling. It would also restrict other marketing practices such as unsolicited phone calls and email.

The directive approved by the Parliament follows a broader law covering the sale from a distance of all other products, adopted in 1997. Financial services were excluded from its scope because they were deemed to be too complicated.

The shape of the directive approved on Tuesday by the Parliament is very close to the text approved by ministers of the European Union member states late last year. The Commission said it is confident that the small differences between the two versions will not be an obstacle to a rapid final adoption of the directive, which has been under negotiation since 1998.


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