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Summaries of EU Legislation

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Distance marketing of financial services: consumer protection

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Distance marketing of financial services: consumer protection

SUMMARY OF:

Directive 2002/65/EC — consumer protection in cases of distance-selling of financial services

SUMMARY

WHAT DOES THIS DIRECTIVE DO?

It establishes common rules for the marketing of financial services by suppliers to consumers in the EU, thus enhancing consumer protection.

KEY POINTS

Scope: all financial services are covered by the directive including sales of credit cards, investment funds, insurance and personal pension plans to consumers by distance-selling channels such as telephone, fax and the internet.

The directive guarantees protection to the consumer, including:

  • An obligation on the supplier to provide consumers with comprehensive information before a contract is concluded;
  • The right of the consumerto withdraw from the contract within 14 days;
  • A 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 emails (cold calling and spamming);
  • appropriate sanctions by EU countries on suppliers who fail to comply with this directive;
  • proper legal redress, including out-of-court settlement procedures for consumers whose rights are infringed.

The European Commission has carried out a review of the application of the directive in EU countries, most recently in 2009. The review concluded that there was no evidence of consumers facing problems caused by the incorrect implementation of the directive by EU countries.

Directive 2011/83/EC (Consumer Rights Directive) regulates the distance selling to consumers of all other non-financial goods and services, replacing Directive 97/7/EC.

SINCE WHEN DOES THE DIRECTIVE APPLY?

It entered into force on 9 October 2002. EU countries had to incorporate it in national law by 9 October 2004.

BACKGROUND

Distance Marketing of Financial Services

ACT

Directive 2002/65/EC of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directives 90/619/EEC and directive 97/7/EC and 98/27/EC (OJ L 271, 9.10.2002, pp. 16-24)

Successive amendments to Directive 2002/65/EC have been incorporated in the basic text. This consolidated version is for reference purpose only.

RELATED ACTS

Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ L 304, 22.11.2011, pp. 64-88)

Communication from the Commission to the Council and the European Parliament — Review of the distance marketing of consumer financial services Directive (2002/65/EC) (COM(2009) 626 final of 20.11.2009)

last update 20.01.2016

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