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Soonghee Lee The D Group scandal that began in September 2013 spread the news in the market about the mis-selling practices by D Securities. An unprecedented situation unfolded, in which more than 20,000 investors filed complaints against D Securities with the Financial Supervisory Service (FSS) within a short period of time. It was reported that, to resolve this scandal quickly, the FSS deployed more than 24,000 man-days to inspect the matter. As a result, on July 31 2014, the Financial Disputes Mediation Committee (FDMC) at the FSS rendered a decision that ordered D Securities to compensate some of the investors by paying them back at least 15% and at most 50% of their investment amount. This decision was based on the reasoning that D Securities committed mis-selling, such as advising some of the investors to invest in inappropriate investment products and not having provided adequate explanations at the time of selling corporate bonds and CPs (commercial papers) issued by other D Group affiliates. The FSS announced that 67% of the contracts subject to inspection were found to be cases of mis-selling, that the average portion of compensation for a given amount of investment is 22.9%, and that the investors who were found to be subjected to D Securities' mis-selling practices would be able to recoup a total of 64.3% of the investment amount (after taking into account the compensation that the affiliates of D Group that issued the corporate bonds and CPs would make based on their corporate restructuring plans). If both parties agree to the dispute mediation decision by the FDMC and the decision stands, then the decision would have the same effect as a final decision by the court, and D Securities would have to report the result of its performance to the FSS within 20 days after the decision became finalised. If a party does not accept the dispute mediation decision, then the decision would fail to become established and would not be binding on the parties; therefore, investors would have to resort to other remedial methods such as filing a lawsuit. On the other hand, the FSS limited the cases subject to this instance of dispute mediation to mis-selling cases. It further announced that investors would be able to enforce their rights by separately filing a lawsuit if it is later found that D Securities fraudulently made the sales.

Consumer protection has become a hot topic in Slovakia in recent years, particularly when it comes to unfair business practices used by sellers. To address this issue, the Slovak Parliament passed a new piece of legislation, the so-called Distance Selling Act, which took effect in June 2014. It will increase the level of consumer protection and legal certainty in the relationship between consumers and sellers. In this article, we would like to inform you on the most important changes the new legislation introduces. The Distance Selling Act applies to sales that are made through any form of communication over a distance or without any personal contact between the consumer and the seller. One of the most significant changes is the extension of the time period during which consumers can cancel the purchase contract, which is now 14 calendar days as opposed to the seven-day period under the old regime. In addition, the consumer now has the right to retain the goods until the seller refunds the money already paid as a deposit.

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