RegRally Insights: Consumer Protection Regulation

Recap enforcement actions and preview upcoming deadlines and events with a newsletter on competition law and consumer protection powered by ECOVIS ProventusLaw.

Bank of Lithuania Enhances Guidelines for Payment Cancellation and Tracing Procedures

The Bank of Lithuania has issued new guidelines addressing the challenges and misunderstandings that often arise between financial institutions and fraud victims regarding payment cancellation and tracing procedures. The key focus is to improve clarity and responsiveness when handling customer requests.

Key Recommendations:

1. Prompt Responses: Financial institutions should act quickly on customer requests to cancel payments to enhance customer trust and satisfaction.

2. Clear Information on Reserved Funds: Institutions must provide transparent updates on the status of “reserved funds” and clarify if they can be recovered.

3. Payment Process Education: Customers need to be informed about the payment process, particularly for card transactions, including the timing of when a payment is deemed completed and the procedures for cancellation or tracing.

Best Practices Identified:

Priority handling of cancellation and tracing requests.
Availability of staff 24/7 to assist customers.
Provision of real-time status updates regarding requests.
Multiple communication channels for submitting requests, including email, online accounts, chat, phone, and in-person options.

Poor Practices Highlighted:

Limiting request processing to business hours.
Providing essential information only in general contracts or obscure locations on websites.
Failing to offer clear explanations regarding the status of “reserved funds.”

These guidelines aim to standardise procedures across financial institutions, improve customer experience, and foster greater accountability in the financial sector.

Bank of Lithuania Proposes Amendments to Payment Law to Enhance Consumer Rights

The Bank of Lithuania has proposed significant amendments to the Payment Law to enhance consumer rights and ensure transparency in payment service offerings. The primary goal is to prevent payment service providers from automatically including non-payment services in their packages without obtaining explicit consumer consent.

Key Points of the Proposal:

1. Consumer Choice: The amendments will ensure that consumers can select payment services relevant to their specific needs.

2. Prohibition of Unilateral Imposition: Payment service providers will be prohibited from imposing unwanted products or services on consumers without their agreement.

3. Separation of Services: Consumers must always be able to utilise a payment account and related services independently, free from any tied non-payment products.

4. Transparent Pricing: Providers must present clear and understandable pricing information for bundled and separate services, facilitating informed consumer decision-making.

5. Consent for Grouped Services: Providers will not be allowed to offer tied or grouped services without obtaining prior consent from the consumer.

These proposed amendments aim to bolster consumer protection, promote fair competition, and foster greater transparency within the payment services sector in Lithuania. The Bank of Lithuania seeks to create a more equitable and customer-centric financial environment by enhancing consumer rights.

Lithuanian Ministry of Finance Proposes New Legislation to Strengthen Consumer Protection in Remote Financial Services

The Lithuanian Ministry of Finance has drafted new legislation aimed at enhancing consumer protection for remote financial service agreements. This initiative is part of a broader effort to align with EU standards and adapt to technological advancements in the financial market.

Key Changes Proposed:

1. Increased Information Requirements: Service providers will face stricter obligations to provide comprehensive information to consumers before entering into financial agreements.

2. Access to Human Specialists: Customers will have mandatory access to human specialists for consultations, ensuring personalized support when navigating financial services.

3. Simplified Contract Cancellation: The legislation will facilitate a straightforward process for cancelling contracts, making it as easy to terminate an agreement as it is to sign up.

4. Prohibition of Dark Patterns: Misleading or manipulative interface designs that could confuse consumers will be banned, promoting transparency and fairness in online interactions.

5. Clear Contract Explanations: Service providers will be required to offer detailed explanations of contract terms and any additional services to ensure that consumers fully understand their agreements.

6. Stricter Sanctions: Enhanced penalties for non-compliance with these regulations will be introduced to ensure accountability among service providers.

7. Technical Integration for Cancellation: The legislation will mandate the integration of technical functions within electronic interfaces to allow for easy contract cancellation.

These proposed changes aim to provide a high level of consumer protection throughout the EU, ensuring that individuals are safeguarded regardless of the location of the service provider. The draft legislation seeks to transpose the European Parliament and Council Directive on consumer rights related to distance financial service contracts into national law, reflecting Lithuania’s commitment to enhancing consumer rights in a rapidly evolving financial landscape.