Proposed Directive regulating the marketing of financial services at a distance.
Topic: Consumer Protection, Financial Servirotection, Financial Services
New development: Proposed Directive regulating the marketing of financial services at a distance.
Background: The principal EU Directive on the Protection of Consumers in respect of Distance Contracts (now signed off and due for implementation by 4 June 2000) specifically excludes financial services from its ambit because of the very special consumer protection considerations which it is felt apply to the remote selling of financial services. The broad aim is the same, however, to provide a high level of protection for consumers of retail financial services in circumstances where the sale takes place other than in the physical presence of the consumer and retailer, for example by fax, internet or telephone.
What will change: If the proposals survive in their present state, consumers will be entitled to receive detailed information about the product on offer before the purchase contract can be concluded. They will also be allowed a cooling off period of anything between 14 and 30 days after the signing of the contract during which they will have the right to pull out without penalty.
The right to withdraw will not, however apply to a number of particular financial services including certain types of property loans, foreign exchange services and trade-in securities.
Timetable: Difficult to predict at present, but could be sign-off by the end of 1999 with implementation by June 2002 What happens next: The present proposals are the result of the European Parliament's comments on an earlier draft. The Commission will now submit these amended proposals to the EU's Council of Ministers to see if agreement can be reached before re-submitting the draft to the European Parliament for what will hopefully be their final approval.