Regulatory framework for distance selling of financial services
The European Commission has recently adopted a proposal for a Directive to establish a clear, regulatory framework for the marketing of financial services at a distance. The aim of the proposal is to establish a high level of protection for consumers of retail finance services marketed by telephone, mail or by electronic means such as the Internet. This is to encourage consumer confidence in such services and to provide financial service suppliers with a clearly defined legal framework valid for distance selling throughout the Single Market, without hindrance. In particular, the Directive would lay down rules concerning: - The consumer's right to a period of reflection before agreeing to a contract, therefore allowing them an opportunity to compare various offers and to examine the contract adequately before giving their consent; - The consumer's right of withdrawal for a period of up to 14 days without penalty if the contract was signed before the consumer has received its full terms and conditions and or there was unfair pressure during the reflection period. In launching the proposal, the European Commissioner for Consumer Affairs, Mrs Emma Bonino, commented that the proposed legislation would "safeguard the interests of consumers at a high level of consumer protection and so help build confidence in the use of these new techniques, while encouraging new market entrants, so that consumers should enjoy greater choice and more competitive prices".