Communicating with online banking customers

In Case C-375/15 (the BAWAG case) the CJEU examined the scope of a payment service provider’s obligation to communicate changes to information and conditions, and to framework contracts, to e-banking customers.  In particular, the CJEU considered whether a bank may notify its customers of account information and contractual changes via an electronic banking mailbox.  The CJEU clarified the conditions that must be met for information to be “provided” to customers on a “durable medium”, as required by the Payment Services Directive (PSD) (2007/64/EC).

The Facts

BAWAG, an Austrian Bank, offers its customers e-banking services and maintains electronic mailboxes for its customers as part of its e-banking platform.  Customers may log into the mailbox using their standard individual credentials. BAWAG uses standard terms and conditions governing the consumers’ use of the online banking website.  The standard terms and conditions relating to the online banking website contain a term stating that ‘Notices and Statements’  (including notices of changes, account information, credit card statements etc.) shall, where the customer has agreed to e-banking, be received by him by post or electronically by making them retrievable or transmitting them by means of e-banking.  Access to the e-banking website is provided in accordance with a contract which is ancillary to the contract relating to the opening and operation of a bank account and which also forms part of a framework contract.  The Austrian Consumer Protection Association, claimed that the abovementioned term did not meet the requirements of the PSD.  The Austrian Supreme Court referred the issue to the CJEU for a preliminary ruling.

The CJEU considered whether information given by the bank to its customers through the e-banking mailbox is “provided” (as opposed to merely being “made available”) through a “durable medium” for the purposes of the PSD.

Relevant provisions of the PSD

Article 41(1) requires the payment service provider (PSP), in good time before the user is bound by any framework contract or offer, to “provide” the user on paper or on another “durable medium” with the information and conditions specified in Article 42.

Furthermore, Article 44(1) requires any changes in the framework contract, as well as the information and conditions specified in Article 42, to be “provided” by the PSP to the user on paper or on another “durable medium“, no later than two months before their proposed date of application. The PSP is also obliged to inform the user that he is to be deemed to have accepted the changes if he does not notify the PSP that he does not accept them before the proposed date of their entry into force.

Article 4(25) defines the concept of a “durable medium” as any instrument that enables the PSU to store information addressed personally to them in a way accessible for future reference, for a period of time adequate to the purposes of the information, and allows the unchanged reprodiction of the information stored.

The Decision

The CJEU held that two conditions must be met for the communication of changes to the information and conditions (provided for in Article 42), and changes to the framework contract, via an electronic mailbox, to be considered to have been “provided” on  a “durable medium” for the purposes of Articles 41(1) and 44(1) of the PSD.  Those two conditions are:

  1. The PSP’s website must allow users to store information addressed to them personally in such a way that they may access it and reproduce it unchanged for an adequate period, without any unilateral modification of its content by that PSP or by any other professional being possible; and
     
  2. If the user is obliged to consult the PSP’s website in order to become aware of the information, then the transmission of that information must be accompanied by active behaviour from the PSP, aimed at drawing the user’s attention to the existence and availability of the information on the website.

In the event that a user is obliged to consult a website in order to become aware of the new information, and the transmission of the information is not accompanied by active behaviour on the part of the PSP, then that information is merely “made available” (and not “provided”) to users.  The CJEU stated that “it cannot reasonably be expected of payment service users…that they should regularly consult all electronic communication services that they are signed up to, a fortiori because, under…Article 44(1)..those users are deemed to have accepted the changes to the framework contract proposed by those providers.”

The Austrian Supreme Court must now determine whether the two specified conditions have been met and whether, in light of all the circumstances, the changes to the information and conditions defined in Article 42 of the PSD, and the changes to the relevant framework contract, can be regarded as having been actively communicated by the bank.

This article was first published in the Ireland IP & Technology Law Blog on 14 March 2017.

For further information please contact Davinia Brennan.