Unfair commercial practices
Help and advice
"I’ve just bought a life insurance policy over the Internet, and now I want to change my mind. Can I cancel?"
While surfing the Internet, Matt from Luxembourg saw an advert offering a cheap life insurance policy. He decided to sign up for 20 years’ coverage. However, when he looked into other policies later, he thought he had paid too much and might be able to get a better deal.
"There’s nothing wrong with what I bought, but I made the decision quickly, and now I want to change my mind. Is this possible?"
Matt’s case is covered by European laws on the distance marketing of financial services. This gives him a cooling-off period of 30 days (for life insurance and personal pensions) in which he can withdraw from the contract. During this time, he can inform the insurance provider that he wishes to withdraw, and receive a refund for what he paid. He should have been told about this right of withdrawal before signing the contract, and this should be stated in the documents he receives.
These days, consumers are receiving more commercial offers than ever — be it by post, over the phone, or on the Internet. These different ‘distance-selling’ techniques may appear to offer cost savings to consumers. However, without the face-to-face sale, there are fewer opportunities to ask questions or to make sure you are really happy with what you are buying. The European law on the distance marketing of financial services aims to protect you by:
- banning abusive marketing practices that seek to oblige consumers to buy a service they have not asked for;
- restricting other practices such as unsolicited phone calls and e-mails (‘coldcalling’ and ‘spamming’);
- obliging financial services firms to provide consumers with all the necessary information before a contract is concluded, including contact details of the supplier, price and payment arrangements, contractual rights and obligations and performance of the service offered;
- giving the consumer the right to withdraw from the contract during a cooling-off period, normally of 14 days but rising to 30 days for life insurance and personal pensions.
Further information: EU rights on distance marketing of financial services