European UnionConsumer Rights Directive, Adequate Explanations and Human Intervention in Online Tools for Distance Financial Services Contracts (Article 16d)
Directive (EU) 2023/2673, inserting Article 16d(1), (3) and (4) into Directive 2011/83/EU
In force since .
An AI sector rules rule binding public and private bodies.
As of .
What it requires
- This Directive is addressed to the Member States (Article 5), which had to adopt and publish the measures necessary to comply with it by and apply them from (Article 2(1)), so a trader meets these rules through each Member State's national law.
- If you are a trader concluding a financial services contract with a consumer at a distance, give the consumer free of charge, before the contract is concluded, adequate explanations that make it possible to assess whether the proposed contract and ancillary services are adapted to the consumer's needs and financial situation (Article 16d(1)).
- If you use online tools, let the consumer request and obtain human intervention at the pre-contractual stage and, in justified cases, after the distance contract is concluded, in the same language as the pre-contractual information (Article 16d(3)).
- Be ready to prove that you gave the adequate explanations, since the burden of proof is on the trader (Article 16d(4)).
Who enforces it
Settledness
- As of
- Open questions
- Does a chatbot or robo-advice tool that a trader uses before a distance financial services contract is concluded count as 'online tools' under Article 16d(3), so that the consumer may request human intervention?
What this law does
Article 16d(1) of Directive 2011/83/EU, as inserted, requires Member States to ensure that traders provide the consumer, free of charge and before the contract is concluded, with adequate explanations of the proposed financial services contract that make it possible to assess whether the contract and ancillary services are adapted to the consumer's needs and financial situation.
Article 16d(3) requires Member States to ensure that, where the trader uses online tools, the consumer has a right to request and obtain human intervention at the pre-contractual stage and, in justified cases, after the distance contract has been concluded, in the same language as the pre-contractual information. Under Article 16d(4), the burden of proof of compliance with the adequate explanation requirements is on the trader.
Article 2(1) of Directive (EU) 2023/2673 requires Member States to adopt and publish the necessary measures by and to apply them from .
When LexLint raises it
When your app profile says your app provides financial services or deploys a chatbot.