On 25 January 2017, the Court of Justice of the European Union (the CJEU) issued a significant judgment (C-375/15) for financial institutions regarding the recognition of special email boxes which were on the servers of such institutions as a durable medium. In this case, clients of the Austrian bank BAWAG (the Bank) with online accounts received information about their account, i.e. account statements, credit card statements or notification of changes, only in special email boxes which were on the Bank's servers. This practice has led to objections by Austrian consumer associations, which stated that this information should be delivered on a durable medium such as paper, CD or hard disk.
Finally, the CJEU stated that the email boxes which were on the Bank's servers (its website) may be considered as a durable medium, provided that certain conditions are fulfilled.
Providing information to clients on a durable medium
A durable medium is defined in the Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market (the Directive) as any instrument which enables the payment service user to store information addressed personally to him in a way that is accessible for future reference for a period of time adequate to the purposes of the information and which allows the unchanged reproduction of the information stored. The Act on Consumer Rights, dated 30 May 2014, also defines a durable medium as any material or instrument further defining the notion from the Directive.
The issue of how this notion should be interpreted is of great practical significance, taking into account the fact that financial institutions sometimes use a website or messages sent through accounts created on servers to communicate with clients. In turn, the President of the Office for Competition and Consumer Protection (the OCCP President) raised doubts as to whether these actions are acceptable. The OCCP President stated that the information should be provided to consumers by way of a traditional letter, USB memory stick or CD.
In its judgment the CJEU stated that the email boxes which were on the Bank's servers (its website) may be considered as a durable medium, provided that two conditions are met:
- The website should enable the payment service user to store information in a way that is accessible for future reference for a period of time adequate to the purposes of the information and which allows the unchanged reproduction of the information stored. Additionally, any possibility that the payment service provider or another professional to whom the management of that site has been entrusted could change the content unilaterally must be excluded, and
- If the payment service user is obliged to consult the website in order to become aware of information, the transmission of the information must be accompanied by active behaviour on the part of the provider, aimed at drawing the user’s attention to the existence and availability of the information on the website.
Thereby, the CJEU does not rule out the possibility of the recognition of such email box as a durable medium, provided that it meets these two conditions. If it doesn’t, the information is merely made available and is not provided, which is not sufficient.
The CJEU judgment should have practical significance for financial institutions. This is also due to the fact that the OCCP President is currently carrying out a few investigations into whether financial institutions duly fulfill information obligations to their clients. Adjustment to the requirements specified by the CJEU should reduce the risks for the financial institutions in connection with such proceedings.