The Distance Marketing of Consumer Financial Services

• This is the identity and main business of the supplier, geographical address at which the supplier is established and any other address relevant to the consumer's relationship with the supplier;
• Where the supplier is not based in the consumers' EU Member State, but has a representative in that country, the identity of the representative should be given along with the geographical address;
• The identity and geographical address of any other professional who will have dealings with the consumer;
• Particulars of registration in any trade or public register, for example a Companies House registration number;
• Particulars of any relevant supervisory authority, for example a FSA registration number and a link to their web site;
• Description of the main characteristics of the financial service.

• The total price to be paid by the consumer including all related fees etc;
• Where relevant, details should be given regarding any fluctuations in price that are dependent on factors out-with the supplier's control;
• Notice of any extra taxes that may exist that are not paid via the supplier or imposed by him;
• Any limitations of the period for which the information provided is valid.

• Arrangements for the payment and performance and any additional costs for the consumer for using distance communication;
• Whether there is a right of cancellation and if so, cancellation information;
• The minimum duration of the distance contract in the case of financial services to be provided immediately;
• Information on any rights of termination and any penalties imposed;
• Practical instructions for exercising the right of cancellation;
• The European Economic Area member state whose laws the supplier is taking as the basis for the contract;
• Any contractual clause on the law applicable to the distance contract or on the law applicable to the competent court;
• The languages that the contractual terms will be made in and in which the supplier will communicate for the duration of the contract;
• Whether there is an out-of-court claim and the methods for accessing this; and
• The existence of guarantee funds or other compensation agreements;
• This information must be provided to the consumer in a clear and comprehensible manner on paper or another durable medium appropriate to the means of distance communication used before the contract can be concluded, but if you market by telephone…

Telephone marketing
Of course it is impractical to suggest that all this information could be provide sufficiently by telephone. So if you market or sell using the telephone, you may supply less extensive information. Of course the more you supply, the easier it is to discharge your duty later should a dispute occur. Similarly, the more information you provide, the clearer the contract will be to the consumer, who will be less likely to dispute anything later.

Best practice is to start the conversation by stating the caller's name and the fact that they are a sales representative employed by or acting on behalf of [supplier’s name]. The caller should then clearly describe the product including the main characteristics. They should also clearly state the total price including taxes, or if it is not possible to give a fixed price then the means of calculating the price. The consumer should also be advised that further information is available on request and that there is the right to withdraw from the contract within the cancellation period.

As the call progresses and the consumer expresses an interest in entering the contract the supplier should provide information to the consumer regarding the respective contractual obligations.

Following up
As well as providing the prior information listed above, the supplier should also ensure that he communicates all the contractual terms and conditions specified above to the consumer on paper or another durable medium (e-mail is permitted). You should do this in good time prior to the conclusion of the contract. Where the consumer has requested that the contract be concluded using a means of distance communication then it should happen immediately after conclusion of the contract. You must also provide the consumer with a copy of the terms and conditions when requested unless you have already communicated these to the consumer and they have not changed.

You should try to provide a copy of the terms and conditions as soon as possible in order to effectively conclude the contract. The cancellation period (discussed below) only begins when the paper or other durable medium copy of the contract terms and conditions is received by the consumer. If the supplier provides the required information in a timely manner the cancellation period will be kept to a minimum and the consumer will have as little time as possible to cancel the contract.

Cancellation
The Regulations allow consumers to withdraw from financial services contracts entered into at a distance. This terminates the contract from the notice of termination being given.

The cancellation period begins on the date of the conclusion of the contract and ends 14 days from that date. The contract is concluded at the point at which the copy of the prior information is sent on paper or other durable medium, hence the commercial interest in sending the information as soon as possible.

In life insurance contracts the cancellation period runs from the date the consumer is informed that the contract has been concluded. The cancellation period in life insurance or personal pension contracts runs for 30 days instead of 14 days.

Method of cancellation
A cancellation notice is to be treated as properly given to the supplier where the consumer delivers, posts, faxes or e-mails it to the supplier. The consumer may also send the notice to a website which the supplier has indicated to the consumer may be used for that purpose.

Where the supplier has indicated to the consumer that cancellation notice may be given over the telephone this is also an acceptable method.

Exceptions to the right to cancel
There are certain circumstances where it is unreasonable to allow a consumer a right to cancel a distance contract. For example, in a contract for travel insurance a consumer could take out travel insurance; go on a short break and return to cancel the insurance. This is clearly unfair.

Therefore a consumer has no right to cancel a distance contract:

• Which relates to a financial service where the price depends on fluctuations in the financial markets which are out-with the control of the supplier; or
• Which has been fully completed by both parties at the consumer's express request before the consumer gives notice of cancellation.