Payment systems in Greece
(By INKA Greece)

FINANCIAL SERVICES AT DISTANCE

A. DOCUMENTS
I. Distance Selling in general.
The rapid technological progress in the field of telecommunications has already defined a change of era for the commerce. Due to this progress the marketplace has acquired a new dimension overthrowing the traditional view of practicing trading activities . The effect of the electronic revolution has already exceeded even the boldest predictions, whereas its size and results, even in the near future, cannot be easily comprehended. The growth of the distance selling factor in this environment is continuously increasing, as various means of technology enable the offer, negotiation and conclusion of the contracts at distance in an unprecedented quick and easy manner; for example by pressing a single button in a computer . The sector of commerce – very sensitive to modern ways of communication – could never ignore this technological evolution and the offered advantages. Without any prejudice to traditional activities, modern trade is keen on taking advantage of the new technological means and promoting its sales through distance selling.
Distance selling is defined as the conclusion of a contract regarding goods or services whereby the contract between the supplier and the consumer takes place by means of technology for communication at distance . The “ distance” element means that the two parties do not meet face to face, that they meet without any physical presentation of the supplier or the consumer; facts that are not anymore necessary due to the technological progress. In order to complete the definition of the notion distance selling, both legislation and theory demand that there must be an organized distance sales or service provision scheme run by the supplier, so that services provided on a strictly occasional basis and outside a commercial structure dedicated to the conclusion of distance contracts that do not fall within the scope of this definition.
This sector is expanding quickly in Europe due to the rapid growth of information and communication technologies, but also due to the fact that several companies are involved in distance selling. In the EU this evolution is deemed as positive and contributive to the successful implementation of the European vision; the internal market is further integrated and the cross – border transactions are encouraged. The distance selling procedure is not only in favor of the integration of the internal market, but it also promises many advantages for the consumer. It is in the interest of consumers to have access without discrimination to the widest possible range of products or services available in the Community in order to choose those best suited to their needs . Consequently, another image of the consumer is illustrated; a consumer being able to buy products or services from his/her home at virtually any time he/she chooses and furthermore to enjoy essential benefits from the price competition that is encouraged from distance selling.
This positive assessment for consumers’ interest and for the functioning of the internal market should not lead to the conclusion that this procedure is free from any problems. On the contrary, the consumer is confronting with several problems or risks, which are attributed to the invasion of his privacy by the use of aggressive and high-pressure selling methods with no respect to the fact that he/she has usually given no prior consent for the contact. Furthermore, the lack of information and the absence of physical examination of the product or service do not allow the consumer to ascertain the nature and the specific characteristics of the service before concluding the contract. Thus, there is a great danger for the consumer to be manipulated by the supplier , who is likely to present the product or service in a misleading way. Additionally, there are certain risks involved regarding the means of payment, especially the fraudulent use of credit cards. These risks should not be underestimated; in fact they constitute perhaps the main reason of why consumers have a limited confidence in the field of distance selling. In order to enhance this confidence and to offer a certain protection for consumers, the EU has taken over several actions on combating fraud and counterfeiting of non- cash means of payment .
In order to guarantee the advantages of this development and diminish all these hazards, theory has suggested that only flexible legal measures can be applied to these new technologies in the form of soft laws and codes of practice. According to this point of view no strict legislative provisions are necessary; however what is crucial to this matter is the interpretative function of the legislator in order to safeguard all the aforementioned benefits. Soon it was clear that the necessity specifically for consumer protection couldn’t be fulfilled on the sole basis of self-regulatory codes or soft laws . On the contrary some measures had to be taken in order to safeguard a high degree of consumer protection, whose rights are vulnerable to abusive tactics by the distance suppliers.
Formulating the legal protection the legislator of the Directive 97/7 on consumers’ protection in respect of distance contracts, preferred to adopt mainly precautionary provisions rather than repressive ones, serving more effectively the aims of enhancing consumers’ confidence in distance selling and of encouraging the smooth operation of the internal market. This is proved by the creation of a right of information both before and after the conclusion of the contract, by the adoption of a right of withdrawal, by the prohibition of unsolicited offers and by the regulation on the fraudulent use of payment cards.
II. Financial services at distance, in particularly
At this point there must be a specific reference to financial services negotiated at a distance, which were excluded from the scope of Directive 97/7 on the grounds that some specific elements of these services were already covered by other Community legislation. Nevertheless, this was deemed to be a “legal gap” and there were many complaints concerning this case, as financial services constitute a crucial factor, where one can spot a true necessity for legal protection. This gap is to be filled by the Directive 2002/65 regarding the distance marketing of consumers’ financial services. Among the Directives 2002/65 and 97/7 a strong relationship and conformity is developing, as the latter lays down the main rules applicable to distance contracts ; therefore there is no contradiction among them.
One has to refer that in Greek article 4 – which is actually an adoption of the Directive 97/7 into the national law - of the Law 2251/1994 does not exclude from its scope the financial services negotiated at a distance . That is why financial services do not constitute a separate field in the national legal order, as far as distance selling is concerned. The Directive 2002 /65 is about to be adopted in the fore coming months and our organization takes part in this procedure.

B. NATIONAL LEGISLATION

I. Article 4 of the Law 2251/1994 on consumer protection
In Greek legal order there is specific reference on distance selling in article 4 of the Law 2251/1994, which is actually a transposition of the Directive 97/7 into the national law.
Examining the transposition of this Directive, one can draw the conclusion that the Greek Law is in conformity with the original Directive taking into consideration the latter’s principles and goals. Nevertheless, there are some points where the national legislator has differentiated the provisions of article 4 from the original Directive, but we have to address that these differentiations function in favor of the consumer ensuring a high degree level of protection. In particular, one can spot the aforementioned differentiations at the following fields:
? The notion of the consumer who does fall within the scope of the article 4 is wider than the one adopted by the Directive 97/7. While the Directive regards as a consumer the person who is acting for purposes outside his trade, business or profession, the Greek Law sets the criterion of the “final user” of the product or the service. The final user will be deemed as a consumer irrespectively of the fact whether the transaction has a professional nature or not . Although there is under strong criticism for this choice of the Greek Law, one has to admit that the law is clear. Therefore, a wider interpretation of the notion consumer can be found.
? Financial services are included in the scope of this article, although the Directive 97/7 has clearly excluded them from its scope according to article 3 paragraph 1. Consequently, the acquirer of financial services negotiated at a distance is not deprived of the protection offered by the legislation, especially the right of information, the right of withdrawal, the prohibition of inertia selling and the fraudulent use of payment cards.
? The period of “at least seven working days” according to the Directive, in order to exercise the right of withdrawal, is becoming a period of ten working days according to the Greek Law (article 4 par.10).
? The violation of the obligation put on the supplier to provide the consumer with a written confirmation of information that the law – according to the Directive – demands. This leads to the invalidity of the contract in favor of the consumer. That means that in such a case the consumer can free himself from the contract whenever he wants and not only in adjustion with the period about the right of withdrawal .
? Of great significance is the provision about inertia selling (article 4 par.4). In accordance to the Directive, unsolicited offers are strictly prohibited and consumer’s failure to answer does not constitute consent. Furthermore, the Greek Law recognizes the consumer the right to use the product at his will without paying; this is actually a civil penalty against the supplier who does not conform to the aforementioned obligation.
Apart from these changes the Greek transposition of the Directive can be regarded as faithful to the provisions of the Directive. The rights of information both before and after concluding the contract, the right of withdrawal, the meaning of “means of distance communication” and the provisions about the burden of the proof, which should be on the supplier, have the same meaning and width both in the national and European level. One should not forget the Ministers’ Decision Z1-178/2001 on transactions via payments cards for the harmonization with the Decision 97/489 of the European Union that protects the owner of a credit card in case of its loss and its use by a third person. The protection is completed by paragraph 11 of article 4 of the Law 2251/1994, which acknowledges to the consumer the right to request the cancellation of the payment and that he is re-credited with the sum paid, in case of fraudulent use.
II. The legal protection
As far as legal protection concerns, the violation of the aforementioned provisions entitle the consumer to ask the cancellation of the contract and further reimbursement according to the articles 200, 281, 297 and 914 of the Greek Civil Code about liability . In case consumer’s right to privacy, particularly regarding freedom from certain mostly intrusive means of communication, such as e-mails and automated phone callers, is roughly violated; there is a field of application for the article 57 of the Greek Civil Code on personality’s protection, which includes rights for reimbursement and ceasing the intrusion of the privacy.
Furthermore, the Greek Law 2251/1994 provides consumers with collective judicial protection through the class action according to the article 11. There have already been some jurisprudential examples of the application of the class action in the field of distance selling, yet not particularly about financial services at distance, other than unsolicited offers in general. One should not ignore that the provisions on unfair and abusive terms (article 2 of the law 2251/1994) and on the liability of the supplier of services (article 8 of the same law) can also be applied in cases of distance selling. Perhaps these provisions obtain a new significance in this field, because distance selling, due to its intangible nature, uses standard, one-sized general terms that are possible to confront with the good faith and the legislation on consumer protection.

C. EUROPEAN LEGISLATION
In order to establish a harmonized and appropriate legal framework for distance contracts pertaining to financial services, while ensuring an appropriate level of consumer protection, the EU has adopted the Directive 2002/65. This directive concerns the distance marketing of consumers’ financial services, which was excluded from the scope of the former Directive 97/7 on protection of consumers in respect of distance contracts. In spite of this differentiation the relationship between the two directives is not contradictory: in contrast they share the same principles and objectives . One has to address that the aforementioned directive covers especially retail financial services, which are specifically addressed to consumers.
With the aim to enhance consumer confidence for distance selling in the field of financial services and also contribute to the smooth operation of the internal market, this directive provides consumer with the following “weapons”:
? The right to reflect before concluding a contract with a supplier: The period of reflection lasts for 14 days, which is an essentially wider period than the one adopted in the Directive 97/7. During this period the supplier is obliged to provide the consumer with all the necessary information.
? The right to withdraw: There is also another 14 days period in which the consumer can exercise this right. Consumers are entitled to make use of this right, when the contract has been signed before the supplier has fulfilled his duty of informing the consumer and when the latter has been unfairly induced to conclude the contract during the reflection period.
? The right to reimbursement: This right is provided, in case certain financial services are not available either totally or partially at the time of contract performance.
? In case of fraudulent use of payment cards the consumer is entitled to request that this payment is to be cancelled and that his bill is to re-credit with the sum paid. One has to refer that the Directive 97/7 contains also a similar provision. This is important for the Greek Law, because it did not exclude from its scope the financial services at distance in the procedure of adopting the latter Directive.
? There is also a strict prohibition against unsolicited offers. The only way for them to be deemed as valid is the prior specific and valid consent.
? Complaint procedures: It is recognized as duty for the Member States to create adequate and effective complaints and redress procedures (even out of court), where consumers’ complaints and disputes will be fairly and quickly settled.
It is very important for the effectiveness of the Directive that all these provisions are acknowledged to have an imperative nature, so that consumer cannot waive the rights conferred to him by the Directive. Due to this environment consumers cannot be compelled to waive the protective function of these rights.

D. Proposal
Through this analysis of the legal status, regarding the financial services at distance, one concludes that a sufficient level of protection has already been formed. The recent Directive 2002/65 has all the necessary and specific characteristics to ensure a high-quality protection , nevertheless it is important to wait for its adoption and implementation. The Member States have the obligation of adopting this Directive into the national law with respect to its objectives and its imperative nature. Our organization is strongly taking part in this procedure (the adoption of the directive into our national law) in an active way, with the aim that this adoption will faithfully follow the aforementioned framework of the Directive 2002/65.
What we find necessary to recommend, is that the implementation of this Directive should be carefully examined, so that there would be an effective protection for consumers. The field of financial services is of an indisputable significance and has a main role for the smooth operation of the single market. Therefore, there is a need for a constant observation on the results of the aforementioned legal framework. Nevertheless, our point of view is that the Directive has the quality to live up to the expectations of an adequate protection of consumer confidence, while contributes to the further integration of the single European Market