Distance selling of financial services

The new Directive

A key principle underlying the European Union is the free movement of goods and services across national boundaries, a principle supported by the adoption of a series of basic rights for consumer purchasers of goods and services from other EU Member States. Those rights include the provision of information and the ability to withdraw from or cancel an agreement within a cooling-off period. There are presently in existence rules relating to the sale of goods and to contracts made electronically, and life insurance policies receive similar special treatment under the Second Life Directive, Council Directive 90/619/EC. The EU has now, after a lengthy gestation period, adopted a Directive Concerning the Distance Marketing of Consumer Financial Services (European Parliament and Council Directive 2002/65/EC), which extends protection to most forms of contracts for the supply of services, including non-life insurance. The Directive has to be implemented by Member States no later than 9 October 2004, two years from the date of its publication.