Brussels, 27/06/2002 (Agence Europe) - The Council has formally adopted the directive on the marketing of financial services at a distance, subsequently outlining the rights of withdrawal and information to be provided to consumers of retail financial services (insurance, banking, pensions and investment services) marketed by phone, fax or internet. This text will complete he directive of 1997 on distance selling, which did not cover financial services. The Council has accepted the amendments of Parliament's second reading, previously negotiated between the Commission and Council (see EUROPE 16 May p 13).
The directive is expected to enter into force in Member States in 2004 and will provide the consumer with information, before and after conclusion of a contract such as the identity and activity of the supplier or intermediary, description of product, total price including commissions, charges, costs, limits within contract expiry date, rights of withdrawal and refund possibilities etc. The document explains that the aim is to obtain greater harmonisation, with Member States being able to maintain or adopt the strictest of legislation.
The document also stipulates consumer rights of withdrawal to "fourteen calendar months", without penalty and without stating a reason. This deadline consists of 30 days for life insurance and private pension schemes. The time limit either begins from the day the distance contact is concluded or the day the consumer receives the contractual conditions if they are provided after the contract is concluded. Withdrawal rights do not apply, however, to financial services where prices depend on financial market fluctuations (foreign exchange services, trading in securities) or travel, luggage or similar insurance policies where the insurance period covered does not exceed a month. Member States can decide whether the right of withdrawal applies to loans for buying property or guaranteed loans for mortgages.
The directive explains that Member States must ensure that in cases of withdrawal, the consumer can request payment cancellations to avoid fraudulent use of their payment or credit cards and that they are able to receive refunds if their payments have been subject to fraud. Non-requested communications (by fax or answer machine messages) are disallowed entirely and suppliers cannot use automated calling devices or faxes for making sales without the permission of the consumer. There is still, however, a grey area that remains with regard to unsolicited e-mails because the directive indicates that Member States "must ensure" that devices other than answer machines and faxes "are no authorised without the consent of the consumer or can only be used in the absence of any clear opposition from the consumer.
The BEUC, the Brussels based consumers' association, is satisfied with this document insofar as it enables Member States to apply and maintain legislation that is more binding. This is the case for the Scrivener Law in France which compels supplies to give consumers a "cooling off" period before concluding a contract.