Distance selling of financial services

• How does distance selling of consumer financial services mean?

According to the Directive 2002/65/EC concerning the distance marketing of consumer financial services, distance financial contract means any contract concerning financial services concluded between a supplier and a consumer under an organised distance sales or service-provision scheme run by the supplier, who, for the purpose of that contract, makes exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded”
 

• What is the difference between a financial service sold in a traditional way and a financial service which has the same content but it is offered under an organised distance sale?

The main difference between the two types of services above regards the possibility, in the second case, to make financial operations in a quicker and cheaper way, having the seller lowered his operating and structural costs.

Moreover, a distance selling of financial services involves a different relation between consumer and trader, based on telephone calls and emails, which hardly ever becomes more personal.

Buying financial service on line might be useful for who prefer to independently and peacefully stay at his own home and evaluate the offers provided taking all the time he need.

The following financial product can easily be provided by distance: 

       -          bank account

       -          credit cards

       -          loans

       -          securities purchases

       -          insurances
 

• Surfing the Net I read a very interesting financial offer proposed by a french company. What are the vantages and the advantages in opening a bank account abroad?

The Directive 2002/65/EC on the distance selling of financial services is part of a wider process of internal market liberalization. Thank to this process, services providers can exercise their activity everywhere and consumer can fully benefit from the most convenient offer, even if abroad.

However, especially within the financial market, before signing a contract you must be very careful: be sure that you have all the necessary information to make the right choice and take notice not only of the offer details but also of bank’s contractual conditions. Indeed, with all probability the services provided by the bank will be the same but some specific operations might require longer execution times and higher costs, because communication services between cross border banks aren’t as easy as between the national ones.

Moreover, is very important to be well informed also regard the protection of costumers’ interests. In case of cross border complaints might be more difficult have your rights respected: there is no European body for these types of disputes.

However, every Member State had his alternative dispute resolution bodies, which assist you in solving your problem and assure the enforcement of some common rules.

·         What are my rights if I want to withdraw from a distance financial contract?

The Directive 2002/65/EC gives consumers the possibility to change opinion and withdraw from the contract without having to specify their reasons or to pay any additional sum. Consumers must withdraw from the contract within 14 calendar days following the conclusion of the contract. However, this period shall be extended to 30 calendar days in distance contracts related to life insurance and personal pension operations.

In order to reach a high level of protection, sellers are obliged to provide in time customers with some compulsory information, so that consumers can appropriately evaluate the financial service proposed and make an informed decision.

The seller must provide information regarding his identity, the price and the qualities of the financial service offered, any potential additional sum or tax to be paid, the conditions of contract fulfillment as well as the conditions of payment, the contract length (if relevant) and, finally, the right of withdrawal.

If the consumer receive all the compulsory information after the conclusion of the contract, the period to exercise the right of withdrawal will begin from the day when the information have been provided.

·         The person who sold me the financial service denied me the possibility to withdraw from the contract. Is it legal?

Generally, the Directive 2002/65/CE gives consumers the possibility to change opinion and withdraw from the contract. However, for the following product there’s no right of withdrawal:

-         financial services whose price depends on fluctuations in the financial market outside the suppliers control, which may occur during the withdrawal period, such as services related to foreign exchange, money market instruments, transferable securities, etc…

-         travel and baggage insurance policies or similar short-term insurance policies of less than one month's duration;

-         contracts whose performance has been fully completed by both parties at the consumer's express request before the consumer exercises his right of withdrawal.