Distance Marketing of Financial Services
European legislation establishes principles relating to financial services which may be provided at a distance. Such harmonisation of principles offers better protection for any consumer negotiating or entering into a contract with a supplier established in another Member State.
Directive on distance marketing of consumer financial services
To boost consumer confidence in the distance marketing techniques - and in particular in internet transactions across borders - the EU has adopted in 2002 a Directive 2002/65 laying down fundamental rights for consumers:
obligation to provide consumers with comprehensive information before a contract is concluded;
consumer right to withdraw from the contract during a cooling-off period;
ban on abusive marketing practices seeking to oblige consumers to buy a service they have not solicited ("inertia selling");
rules to restrict other practices such as unsolicited phone calls and e-mails ("coldcalling" and "spamming").
Review of the Directive
The Communication adopted by the Commission in 2006 informs on the state of play regarding the review of the application of this Directive.
Following its implementation the Commission launched studies to see how it impacts the distance selling of financial services within the Internal market:
"Impact of Directive 2002/65/EC concerning the distance marketing of consumer financial services on the conclusion of cross-border financial service contracts between professionals and consumers"
On 20 November 2009 the Commission adopted another Communication , informing the European Parliament and the Council of the outcome of the review regarding the application of the Directive. This report also takes account of the results of the legal and economic studies above.
In most Member States the market for distance selling of financial services has not changed significantly since the Directive was introduced. At this stage, there is no evidence that consumers face problems arising from incorrect implementation of the Directive. In some cases, where conformity of national rules with the Directive was not sufficient, the Commission launched infringement procedures.
The Commissions intends to monitor the market to check if the increased use of e-commerce is mirrored in the distance financial services sector and to take appropriate action if this is not the case.