Distance marketing of financial services: consumer protection

KEY POINTS

Scope

The directive covers all financial services, including credit cards, investment funds, insurance and personal pension plans, that can be sold to consumers through distance-selling channels such as by 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 consumer to withdraw from the contract within 14 days;
• a ban on abusive marketing practices which try to oblige consumers to buy a service they have not requested (‘inertia’ selling);
• rules to restrict other practices such as unsolicited phone calls and emails (cold calling and spamming);
• appropriate sanctions by EU Member States 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 consumer rights directive – Directive 2011/83/EU (see summary) – regulates the distance selling to consumers of all other non-financial goods and services, replacing Directive 97/7/EC.

Review of the directive

The review of the directive was included in the 2020 commission work programme (Annex II – REFIT initiatives, ‘A New Push for European Democracy’). An evaluation of the directive was also published in 2020.

Repeal

Directive 2002/65/EC will be repealed by Directive (EU) 2023/2673 as of 19 June 2026.