On 16 November, the Government approved the Draft Bill regulating consumer service, according to the objectives of the new European Consumer Agenda launched by the European Commission.
This Draft Bill seeks to comprehensively approach the regulation of customer services within companies by establishing a baseline that must be achieved in relation to the provision of this service, as well as several new measures to enhance the standards of the customer service provided by companies.
This new regulation will affect several entities such as:
While this Draft Bill aims to unify in a single law all the customer service regulation, the current text foresees maintaining both the sectorial regulation and the sector-specific supervisors that currently exist. Therefore, the National Securities Market Commission (CNMV), the Bank of Spain and the Directorate General of Insurance and Pension Funds (DGSFP) will preserve their authority in this matter.
The Second Additional Provision of the Draft Bill proposes major amendments to Law 44/2002 of 22 November 2002, which will continue to be applicable in the financial sector, although the Draft Bill itself will serve as a baseline for those unaddressed matters in Law 44/2002. Furthermore, as a consequence of these amendments, Order ECO/734/2004 of 11 March 2004 on customer service departments and financial institutions ombudsman, is partially revoked.
In particular, the Draft Bill will modify article 29 of Law 44/2002 and introduce six new articles (29.bis to 29.septies), substantially modifying the previous regime. The main novelties introduced by the Draft Bill are the following:
(i) It regulates the separation of the CS department from other departments (as already was established in Order ECO/734/2004, of 11 March) and the obligation to provide the customer service department with sufficient means and human resources to carry out its tasks.
(ii) It establishes the obligation to provide an around the clock customer service, 24 hours a day, every day of the year.
(iii) Companies will not be allowed to use answering machines as the exclusive means of customer service.
(iv) Customers shall have the right to talk to an operator who is able to respond in real time.
(v) Regarding customer service employees, they will need to have a specific training in accordance with the sector and activity of the company.
(vi) Customer complaints resolution times will be reduced from the actual two months to one month.
(vii) It introduces two new concepts: “incident notice” and “enquiry”, apart from the already existing concept of “claim”.
As it can be noticed, the Draft Bill introduces relevant changes in the customer service regulation for financial services providers, such as insurance companies and insurance intermediaries, which will have to make significant investments in order to adapt to the new regime and comply with the new obligations.
For instance, the obligation to provide 24-hour customer service will force insurers and insurance intermediaries to have enough human resources to provide this service uninterruptedly and, in those cases in which the regulations allow the outsourcing of the customer service, will lead to an increase in the costs of the outsourced service.
In addition, the Draft Bill raises doubts regarding as to how the customer services will resolve “enquiries” (which are defined as “advice in relation to the service”). With the new regulation customers will be able to ask the customer service for advice in relation to the service provided, so insurers and insurance intermediaries should be aware of the limits and extent of such advice to avoid the risk of turning a merely informed sale into a sale where advice is provided.
Another issue that also remains unanswered is whether the customer service staff of insurance companies and insurance intermediaries (who, as previously stated, will need to have a specific training in accordance with the sector and activity of the company) will need to comply, as employees engaged in insurance distribution, with the training requirements set in RD 287/2021 and the Resolution of 3 June 2021 of the Directorate General of Insurance and Pension Funds.
It shall be noted that with the current wording, the Draft Bill will affect all companies that provide these services in Spain, regardless the place where they are established, and this will force insurance companies and insurance intermediaries conducting business in Spain under the freedom of establishment or the freedom of services basis to comply with the new requirements as well.
Regarding to its application in time, the Draft Bill, which is currently still in parliamentary procedure and could undergo modifications or amendments before it is approved, establishes a period of six months since its entry into force order to allow companies to adapt to the new text, after which it will be fully applicable.