Document 16 - Government Bill amending certain Acts in connection with financial services contracts – EU
Summary
The proposed law brings a comprehensive regulation of the rules for concluding financial services contracts at a distance, in particular through an online interface. It introduces new obligations for entrepreneurs, such as a ban on manipulative practices in the online environment (so-called dark patterns), the obligation to provide clear and understandable pre-contractual information, and the possibility for consumers to withdraw from the contract via a special button. Consumers receive more protection, such as the possibility to withdraw from the contract even in cases where not all pre-contractual information has been provided, with a time limit. The law also lays down stricter rules for reimbursement of insurance contracts and introduces limitation periods for exercising the right of withdrawal.
An important part of this is the harmonization of Czech legislation with the European DMFS Directive, with sectoral legislation taking precedence over the general regulation of the Civil Code in key areas such as pre-contractual information and the right of withdrawal. The Czech National Bank and the Czech Trade Inspection Authority are given powers to supervise compliance with these rules. The law also takes into account the needs of persons with disabilities, such as the obligation to provide information in accessible formats.
The law is scheduled to come into force in June 2026, with its impacts on consumers and the financial services market being reviewed after five years. The aim is to increase consumer protection, simplify withdrawal processes and ensure transparency in the provision of financial services at a distance, including out-of-court dispute resolution and the burden of proof for entrepreneurs in disputes.
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[1/6] The proposed law introduces changes in the area of concluding financial services contracts at a distance, in particular through online interfaces. It introduces new obligations for entrepreneurs, such as a ban on manipulative practices in the online environment (so-called dark patterns) and an obligation to allow consumers to withdraw from a contract using a button in the online interface. It also clarifies the rules on the provision of pre-contractual information, including its layering, and introduces an obligation to properly explain financial services to consumers. Consumers receive more protection, such as the possibility to withdraw from the contract even in cases where not all pre-contractual information has been provided, but with a time limitation of this possibility. The Act also regulates the relationship between general and sectoral legislation, with sectoral regulation taking precedence in key areas such as pre-contractual information and the right of withdrawal. The proposal is in line with the European DMFS Directive and adapts Czech legislation to modern ways of concluding distance contracts.
[2/6] The new regulation introduces consumer protection against so-called “dark patterns” in the online environment, which are manipulative practices that can influence consumers’ decisions to the detriment of their interests. These practices will be considered unfair commercial practices and will be prohibited if they materially distort consumer behaviour. The Czech National Bank is given the power to supervise compliance with obligations relating to dark patterns and remote financial services. An obligation for entrepreneurs to allow consumers to withdraw from a contract concluded online via a special button, which must be easily accessible and clearly marked, is newly introduced. The regulation also sets out the primacy of European sectoral legislation over the general regulation of the Civil Code in the areas of pre-contractual information, explanations and the right of withdrawal. Consumers have the right to clear and understandable information, including the possibility to obtain explanations from a human where the information has been provided by automated tools.
[3/6] The proposed law regulates the rules for financial services contracts concluded at a distance, including new obligations for providers and consumer rights. It introduces stricter requirements for pre-contractual information, including the possibility of so-called layering of information, and protection against unfair practices in the online environment (so-called dark patterns). Consumers will have the option to withdraw from contracts concluded online via a special button, which will simplify the process. The law also introduces limitation periods for exercising the right of withdrawal and regulates the rules for the return of benefits for insurance contracts. The law is planned to come into force in June 2026, with the aim of harmonizing with European legislation and increasing consumer protection.
[4/6] The proposed legislation focuses on the remote conclusion of financial services contracts, while maintaining the general obligation to provide proper explanations without specification for specific services. The consultation showed that the introduction of stricter rules could lead to higher costs for service providers and questionable benefits for consumers. The amendment to the Civil Code and the Consumer Protection Act includes a ban on manipulative online interfaces and the obligation to allow withdrawal from the contract via a button. Supervision of compliance with the obligations will be carried out by the Czech Trade Inspection Authority, the Czech National Bank and other authorities according to specific areas. The effectiveness of the amendment will be reviewed after five years, especially with regard to the impacts on consumers and the financial services market.
[5/6] This part of the Act focuses on the rights of consumers when concluding financial services contracts at a distance. Consumers have the right to clear and understandable information before concluding a contract, including the possibility to withdraw from the contract within 14 days, or 30 days for life insurance or pension products. Traders must ensure that consumers can withdraw from the contract through an online interface, for example by using a button, and confirm the acceptance of this withdrawal. If the entrepreneur provides misleading information, the withdrawal period is extended to 3 months from the discovery of the deception. The law also lays down the obligations of entrepreneurs regarding the explanation of contractual terms and the burden of proof in disputes. Specific rules apply to financial services such as investments, insurance and pension products, and include exemptions for short-term insurance or products dependent on financial markets.
[6/6] This part of the document focuses on the rules for the provision of information to consumers when concluding financial services contracts, in particular at a distance. It lays down an obligation for traders to provide pre-contractual information, including price, risks, withdrawal conditions and other essentials, in a clear and accessible form, including formats for persons with disabilities. Consumers have the right to withdraw from a contract within 14 days, up to 30 days for some types of contracts, and traders bear the burden of proof of compliance with information obligations. The document also regulates the rules for out-of-court dispute resolution and stipulates that in the event of a conflict with other EU rules, the specific rules of those rules take precedence. Specific provisions apply to contracts concluded electronically, including requirements for clarity and the possibility of storing information as a single document.