In a decision of 25 January 2017 in Case C-375/15 regarding the Payment Services Directive (PSD), the Court of Justice of the EU (CJEU) clarified the concept of ‘providing information on a durable medium’. Being a concept mainly to the benefit of consumers that has been integrated in a myriad of European legislations, the decision will impact the way suppliers of goods and services communicate with consumers.
Facts and preliminary questions
In the case at hand, BAWAG, an Austrian bank, and VKI, an Austrian consumer organisation, were opposed over the legitimacy of a clause in the standard agreement between BAWAG and its customers which allowed BAWAG to communicate notices of contract changes (i.e., amendments) to customers through the secured mailbox of its internet banking system. VKI considered this clause to violate the duty to provide information on a durable medium, as set out in the PSD.
In the preliminary question referred, the CJEU was therefore asked whether the above-mentioned practice for notifying amendments to the framework agreement meets the obligation to ‘provide information on a durable medium’.
Considerations by the CJEU
The CJEU begins by recalling that, pursuant to articles 41(1) and 44(1) of the PSD, changes to framework agreements should be provided to the customer by the payment service provider, and this on paper or on another durable medium.
In line with previous jurisprudence, the CJEU states that in order for a medium (such as a website) to be considered as a ‘durable medium’, that medium must enable consumers, in a similar way to a paper form, to be in possession of the relevant information in order to enable them to exercise their rights, as required.
What is relevant for consumers is that they should be able to store the information which has been addressed to them personally (requirement of storability) and to be certain that its content will not be altered (requirement of integrity) so that the information will be accessible for an adequate period and that it will be possible to reproduce it unchanged.
The CJEU indeed confirms that certain websites have to be classified as ‘durable mediums’. This is the case when a website allows the payment service user to store information addressed personally to that payment user in a way accessible for future reference for a period of time adequate to the purposes of the information and allows the unchanged reproduction of the information stored. Furthermore, for a website to be regarded as being a ‘durable medium’, any possibility that the payment service provider or another professional to whom the management of that site has been entrusted could unilaterally change the content must be excluded.
Information has to be provided
The CJEU, however, also recalls the requirement that information should be ‘provided’ to the customer. The CJEU recalls that, for information to be considered as ‘provided’, it is the provider who must actively communicate that information.
In this respect, the CJEU decided that notifying the customer through a secured mailbox on a banking website that the framework agreement had been modified, without any active behaviour of the provider aimed at drawing the user’s attention to the existence and availability of that information on that site (e.g., a text message, a letter, or an e-mail to a private mail address etc.), does not meet the requirement of ‘providing’ as set out under the PSD.
As the obligation to ‘provide’ information ‘on a durable medium’ appears in other rules benefiting consumers, this decision will have a wider impact than only on payment services.
Notably, one can think of:
- the Insurance Distribution Directive 2016/97/EU of the European Parliament and of the Council of 20 January 2016, on the basis of which insurance intermediaries have the obligation to provide their clients with certain information on a durable medium;
- the Markets in Financial Instruments Directive (MiFID II) 2014/65/EU of the European Parliament and of the Council of 15 May 2014, which provides, for example, that when investment advice is being given, the customer should be provided with a written statement on the suitability how the advice meets the preferences, needs and other characteristics of the retail client; and
- the Consumer Rights Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011, which introduces with respect to off-premises contracts the formal requirement for the trader to provide the consumer with information on a durable medium.