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Retail financial services, Archives, Distance marketing

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Distance marketing of financial services



Background

In May 2002, European Commissioners David Byrne and Frits Bolkestein welcomed support by the European Parliament for the proposed Directive.

September 2001: European Commissioners David Byrne and Frits Bolkestein welcomed the breakthrough in the Council of Ministers on the proposed directive. The Internal market, Tourism and Consumer Affairs Council reached a political agreement on common rules for selling contracts for credit cards, investment funds, pension plans, etc. to consumers by phone, fax or internet. Its main features were:

  1. the prohibition of abusive marketing practices seeking to oblige consumers to buy a service they have not solicited ('inertia selling');
  2. rules to restrict other practices such as unsolicited phone calls and e-mails ('cold calling' and 'spamming');
  3. an obligation to provide consumers with comprehensive information before a contract is concluded and
  4. a consumer right to withdraw from the contract during a cool-off period - except in cases where there is a risk of speculation. The newly agreed standards were in line with those already applicable to all other retail sectors.

July 1999: European Commission presented an amended proposal. The Commission followed to a large extent the European Parliament's suggestions for amendments, in particular by maintaining a 'maximum harmonisation' approach, by replacing a two week 'warming up period' before the conclusion of the contract with an obligation on the supplier to provide a comprehensive set of information elements and by introducing a general right of withdrawal.

October 1998: A proposal for a Directive to establish a clear regulatory framework for the marketing of financial services at a distance within the Single Market was agreed by the European Commission. The aim of the proposal was to ensure a high level of protection for consumers of retail financial services (e.g. insurance, banking and investment services) marketed by telephone, by electronic means such as the Internet or by mail, so as to encourage consumer confidence in such services and provide financial service suppliers with a clearly defined legal framework valid for distance selling throughout the Single Market without hindrance. The proposal was intended to facilitate the development of innovative forms of trade in financial services within the European Union and make it easier for consumers to buy financial services in other Member States.

Directive 2002/65/EC

26 June 2002: The Council agreed on the new directive. The agreed standards are in line with those already applicable to all other retail sectors. The Directive will come into force two years after publication in the Official Journal.

Last update: 21.11.2011