BRUSSELS, May 22 (Reuter) - The European Commission began talks on Wednesday which could lead to a new generation of legislation aimed at ensuring consumers get a fair deal from the single market for financial services. But the consumer organisation BEUC criticised the Commission for dithering by presenting a green, consultation paper, rather than solid proposals for legislation. "Further consultation is not needed to demonstrate, for example, that the Commission 1988 recommendation on credit cards is ineffective and should be replaced by a binding measure," the Bureau Europeen des Unions de Consommateurs said in a statement. "The directive on distance selling could have covered financial services without the need for lengthy further examination," it said. Consumer Affairs Commissioner Emma Bonino said that so far consumer protection had mainly been an indirect result of single market legislation, rather than a driving force in itself. "Consumers face difficulties in fully grasping the increased variety and

complexity of financial services on offer. The green paper is a first step to assessing the problems that will need Community action," she said. Both she and the Commissioner responsible for the single market, Mario Monti, forecast that new legislation would be the end result of the exercise. Interested parties have been asked to comment by October 15. The paper covers areas like banking, insurance and securities trading but Bonino stressed that the list in the paper were not exhaustive. The paper looks to the future, when distance selling is expected to spiral as computerised information networks develop. Among the questions it poses are whether there is a need for prior information and cooling off periods, and consumer protection against inertia selling and the unsolicited use of means of communication at a distance, including automatic calling machines and facsimile machines. The problems outlined in the green paper include the refusal by financial service providers to sell to non-residents, the refusal o

f one member state to allow interest-bearing current accounts and limits imposed by host countries on the range of services provided. The paper also points to the poor quality of services, lack of information and professional advice, difficulties of enforcing contracts and the fraudulent activities of unregulated intermediaries who often charge excessive fees and offer poor information concerning the product they sell. Lack of harmonisation in taxation at EU level is also seen as a problem as it prevents people from deducting contributions to life assurance or mortgage loan repayments in another member state. Motor insurance coverage for victims of an accident involving a vehicle from another member state, but caused by another vehicle, is another problem.