Distance marketing of financial services - your rights

The Financial Services (Distance Marketing) Regulations 2004 apply to those consumer financial services, such as banking, credit and insurance that are marketed and sold at a distance (without face-to-face contact between you and the supplier). These regulations specify the information that must be given to you before and after a contract is finalised. You have the right to cancel a financial services distance contract and the cancellation period is either 14 or 30 calendar days, dependingon the service bought. 

The law


The distance marketing of consumer financial services (any banking, credit, insurance, personal pension, investment or payment service) is regulated by the Financial Services (Distance Marketing) Regulations 2004. Distance contracts are those contracts that are finalised without any face-to-face contact between you and the supplier or intermediary, such as online, telephone and mail order.

The supplier must provide you with pre-purchase information, written and additional information, give you notice of your right to cancel the contract and tell you what the length of the cancellation period is. If you cancel a contract, the supplier must refund you within a period specified in the regulations. You do not have to pay for financial services you received that were unsolicited (not requested).

What information should a supplier provide?


PRE-PURCHASE INFORMATION
The supplier must give you information that is specified in the regulations in good time and before the financial services contract is finalised. You are entitled to expect that the information is clear, easily understood and accurately reflects the contract. The supplier must clearly explain what their business purpose is.

The information that must be given to you is as follows:

  • the suppliers identity, address and main business
  • the identity and address of any representative used by the supplier that is relevant to your transaction
  • if you deal with a professional other than the supplier, you must be given the professionals identity, address and the capacity in which they are acting for you
  • where the supplier is registered on a trade/public register, details of that registration and the registration number must be provided
  • where the suppliers activity is subject to an authorisation scheme, details of the supervisory body must be given
  • a description of the financial service
  • the total price or the manner for calculating the price, including all fees, charges, expenses and taxes paid via the supplier
  • where relevant, a notice indicating the risks relevant to the particular financial service or that the price depends on fluctuations of financial markets outside the suppliers control and past performance does not indicate future performance
  • a notice that other taxes and costs may exist that are not paid/imposed by the supplier
  • details of the time period that the information is valid
  • arrangements for payment and performance
  • any additional costs
  • whether or not there is a right of cancellation and where there is this right, its duration and the details of how to cancel, including information about the amount you may have to pay in accordance with the regulations, as well as the consequences of not exercising your right to cancel
  • the minimum duration of the contract, where relevant
  • termination rights and any penalties that may be imposed
  • practical instructions for cancelling the contract, such as the address or email address for sending the notice of cancellation
  • the laws, any contractual clauses and language that apply to the contract
  • details of any complaint and redress scheme and how you can access it
  • details of any guarantee funds or other compensation arrangements

If the supplier of a financial service contacts you by phone, they must clearly identify themselves and give the business purpose of their call at the beginning of the conversation with you.

If you agree, the supplier only needs to give you the following information over the phone:

  • the callers identity and the link they have with the supplier
  • the total price or manner in which the price can be calculated, including all taxes paid via the supplier
  • notice that other taxes or costs may exist that are not paid/imposed via the supplier
  • whether or not there is a right of cancellation and where there is this right, its duration and the details of how to cancel, including information about the amount you may have to pay in accordance with the regulations, as well as the consequences of not exercising your right to cancel
  • that information is available on request and the nature of that information

WRITTENAND ADDITIONAL INFORMATION
The supplier must give you all the terms and conditions that apply to the financial service contract, as well as the pre-purchase information, in writing or in another durable form. You must be given this either in good time before you are legally bound by the contract or immediately after the contract is finalised, if it cannot be provided beforehand.

What cancellation rights do I have?


You have the right to cancel a financial services distance contract orally (where the supplier has indicated they will accept oral cancellations), in writing or in another durable form. If you cancel in writing, you can leave it at the last known address you have for the supplier (it is valid from the day it was left) or send it by post, fax or email (it is valid from the day it was posted/sent). You can also send it by other electronic means such as via an internet address or website.

Where there is a secondary distance contract attached to a financial services distance contract, for example credit card insurance taken out when you apply for a credit card, and they are both provided by the same supplier or a third party connected to the supplier, cancellation of the main contract automatically cancels the secondary contract unless you specify otherwise.

What is the length of the cancellation period?


If the supplier has given you the written information and terms and conditions specified in the regulations, the cancellation period begins on the day after the day the financial services distance contract was finalised and ends 14 calendar days later.

If the supplier does not give you the written information specified in the regulations on or before the contract is finalised, but provides the information, as well as the terms and conditions, at a later stage then the cancellation period begins on the day after the day you receive them and ends 14 calendar days later.

In the caseof distance contracts for life insurance and personal pensions, the cancellation period is 30 calendar days.

Are there any exceptions to the right to cancel?


The regulations set out those contracts to which the right to cancel does not apply:

  • a contract for a financial service where the price depends on fluctuations in the financial market that are outside the suppliers control and that might occur during the cancellation period, such as foreign exchange
  • a contract whose performance has been fully completed at your request before you give notice of cancellation
  • a connected insurance contract that covers travel risks and has a total duration of less than a month
  • a contract where a supplier provides credit and your requirement to repay is secured by a legal mortgage on land
  • a credit agreement cancelled under the Consumer Protection (Distance Selling) Regulations 2000
  • a credit agreement cancelled under theTimeshare Act 1992
  • a restricted use credit agreement or a bridging loan to finance the purchase of land or an existing building

There are some circumstances where you may still have a right to cancel an excepted contract where the supplier has not complied with their obligations to provide you with written information and terms and condition. If you have not received this information by the end of the 6th day after the day the contract was finalised, you can cancel it duringthe period beginning on the 7th day and ending when you received the last of the written information and terms and conditions.

How do I obtain a refund?


The supplier must refund you as soon as possible or in any event within 30 calendar days from the date of cancellation. Note that the 30 calendar days refund period can commence from the date the supplier actually received the notice of cancellation, rather than the date you cancelled, if they can prove it is later.You should therefore follow up an oral cancellation as soon as possible with written confirmation.  The supplier can deduct a reasonable charge for services actually provided but only if you were informed that charges would be payable. You cannot be charged if services were provided before the cancellation period without your prior request.

If you provided any security as part of the contract, it must be returned to you after you have cancelled.

If you received a sum of money or property from the supplier, you must return it within 30 calendar days from the date you cancelled the contract.

My card was used fraudulently to buy a financial service - what are my rights?


You are entitled to ask for the payment to be cancelled and the amount recredited to your account or returned to you by the card issuer. If the card issuer believes the payment was authorised, it is for them to prove it.

I received a demand for payment for a financialservice I havent bought - what are my rights?


If you received unsolicited (not requested) financial services you are under no obligation to pay for them.

Enforcement of the Regulations


Offences are committed if a supplier fails to provide details of their identity and their commercial purpose. Supplying unsolicited financial services, demanding payment, threatening legal proceedings, placing you on a defaulters register or starting/threatening collection procedures are all offences.

These regulations are enforced by the Financial Conduct Authority and trading standards. If you have a complaint, you should report it to Citizens Advice consumer service for referral to trading standards.

I am the victim of a loan scam - what can I do?


Not all offers of financial services are genuine. You may see an advertisement in a newspaper or online for a loan where your application will be automatically approved or you may receive a phone call guaranteeing you a loan. You will be asked to pay an up-front fee. Once you have paid this fee, you may not hear from the supplier nor will you receive the loan.

Please see our Conned by Phone Scams leaflet for more information.

Please note


This leaflet is not an authoritative interpretation of the law and is intended onlyfor guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted.

For further information please contact the Citizens Advice consumer service, which provides free, confidential and impartial advice on consumer issues. Visit www.adviceguide.org.uk or call the Citizens Advice consumer helpline on 03454 040506.

Key legislation


Financial Services (Distance Marketing) Regulations 2004

Last reviewed/updated: July 2013

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