4.13 Distance Marketing

S.I. No. 853/2004 European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004

• Covers banking, insurance and personal pensions contracts.
• Applies if you do not physically meet the client.

A distance contract for the supply of a financial service means a contract under which a supplier undertakes to supply a financial service to a consumer under an organised distance sales, or service provision, or scheme operated by the supplier, who, for the purposes of the contract, makes exclusive use of one of more means of distance communication up to and including the time when the contract is entered into.

A consumer in relation to a distance contract, or proposed distance contract, for the supply of a financial service, means a natural person who is acting otherwise than in the course of a business carried on by the person, that is they are acting for purposes of their own personal insurance, e.g. home insurance, motor insurance, pension, term assurance etc.

If the Directive applies to you, you are considered a “supplier”. It only applies if:

- a product or service is supplied exclusively by means of distance communication (in other words, you don’t meet the client at any time from initial contact to conclusion of contract – if you meet at least once, the directive no longer applies), and

- you possess the ability to make distance sales i.e. operate “an organised distance sales/marketing scheme” that is systematically used.