Proposed EC Directive on the distance selling of financial services Available to Purchase

The European Commission has published a revised proposal for a European Parliament and Council directive to harmonise member states' rules on consumer protection in relation to the distance marketing of financial services. Financial services had been specifically excluded from the scope of the Distance Selling Directive which came into force in the UK on 31st October, 2000. Included in the proposal is the right of a consumer to receive a comprehensive set of information about the financial services supplier and the contract before the contract has been concluded, and the right to withdraw from the contract without penalty during a period of 14 days after entering into the contract. Questions have arisen as to whether the proposal is an example of wholly unnecessary intervention at European level and whether it is introducing unnecessary red tape for the financial services industry. One of the most important problems with the proposal relates, however, to a fundamental disagreement between member states as to whether the directive should be a maximum harmonisation measure or simply minimum harmonisation. With the current protracted state of negotiations, it remains unclear as to whether this proposal will ever achieve political agreement.