New proposal amending rules concerning financial services contracts concluded at a distance
The Proposal aims to simplify and modernise the legislative framework by repealing the existing Distance Marketing of Financial Services Directive while including relevant aspects of consumer rights regarding financial services contracts concluded at a distance within the scope of the horizontally applicable Consumer Rights Directive.
The overall objective of the legislation remains unchanged: to promote the provision of financial services in the internal market while ensuring a high level of consumer protection.
EU rules on distance marketing of financial services
Directive 2002/65/EC on distance marketing of financial services protects consumers when they sign a contract with a retail financial services provider at a distance (e.g. through phone or on the Internet).
The rules provide the following rights
- consumers must receive comprehensive information from the providers before a contract is concluded
- consumers can withdraw from the contract during a cooling-off period
- providers must not use abusive marketing practices seeking to oblige consumers to buy a service they have not solicited, known as inertia selling
- providers must not use practices such as unsolicited phone calls and e-mails, known as cold calling and spamming
The relevance, effectiveness, efficiency, coherence with other EU legislation and EU added value of EU rules on distance marketing of financial services were recently assessed in a full fledged evaluation:
- Distance Marketing of Financial Services Directive Evaluation Staff Working Document, 2020
- Executive Summary of the Distance Marketing of Financial Services Directive Evaluation Staff Working Document, 2020
REFIT Evaluation of the Distance Marketing of Financial Services Directive
Study conducted on the current legal framework of the Distance Marketing of Financial Services Directive and its fitness for purpose, via an assessment of its effectiveness, efficiency, relevance, coherence, EU added value and potential for simplification and burden reduction.