European Rights in Payments, Loans and Investments

May marks Europe Day, an occasion to celebrate peace and unity across our continent by commemorating the historic Schuman Declaration: a proposal for cooperation among European countries, put forward in 1950 by French Foreign Minister Robert Schuman. This declaration is considered the founding act of what is now the European Union.

The cooperation between Italy and other European countries has not only brought us 80 years of peace, but also shared rules that protect us in many aspects of daily life. One such area is finance: European rules establish basic rights that safeguard us when we make payments, open a bank account, apply for a loan or invest our savings.

These rules are the result of negotiations among representatives from EU member states. Generally, legislation is proposed by the European Commission and needs to be approved by both the Council of the EU and the European Parliament. To be enforceable in Italy, it must not be in contrast to the fundamental principles of our Constitution.

Here are some examples of European legislation that introduced protections for financial consumers.

Payments: Speed and Security

Thanks to EU legislation, you can now send and receive instant euro transfers: the money is credited to the recipient's account in less than 10 seconds. Banks are not allowed to charge higher fees for these than for standard transfers.

The EU has made online payments more secure by introducing two-factor authentication - a strengthened verification process for the person making the payment. It has also capped the amount you may be liable to pay if money is fraudulently taken from your account or card.

Current Accounts: Transparent Costs and Protected Deposits

Before you open a current account, the bank must provide you with a Fee Information Document, which outlines the costs involved and allows you to compare offers. Once the account is open, the bank must keep you informed about the running costs by regularly sending you a Statement of Fees.

European regulations also guarantee that your money is protected if the bank where your account is held were to fail.

You have the right to switch accounts: you can transfer your money and associated services - such as recurring payments for bills - to another bank free of charge.

If you don't already have another account, you are entitled to open a basic payment account, which offers essential services at a low cost.

Loans: Information, Withdrawal and Early Repayment

Banks and financial institutions are required to give you clear, comprehensive information about any loans they offer, through standardised documents that allow you to compare options. For mortgages, this is the European Standardised Information Sheet (ESIS), and for consumer credit, it is the Standard European Consumer Credit Information (SECCI).

For mortgages, you are entitled to a seven-day reflection period before signing the contract.

For consumer credit - such as a personal loan or a finance agreement for a purchase - you have the right to withdraw from the contract within 14 days of signing, without cost and without needing to provide a reason.

Investments: Understanding the Risks

Banks and other organisations offering investment products must clearly inform you of the features, cost and risks of the products, by providing a Key Information Document (KID). This document enables you to compare offers easily.

When you decide to invest, the bank or financial advisor must ensure that the investment suits your level of experience, risk awareness, and financial goals. To do so, they must ask you a series of questions, as part of the MiFID questionnaire.

The EU has also introduced rules for the cryptoasset market, offering protections to those buying or selling certain types of crypto.