Advisers have already been told the gist of the FSA's rules on distance marketing - that stronger cancellation rights apply - but there are also other points to consider in the document published by the regulator today.
For example, advisers looking to technology as part of a distance solution will need to take heed of the FSA’s interpretation of the Distance Marketing Directive’s words on “durable medium” for storing data on products, contract and other details.
The DMD says the internet is not an acceptable “durable medium”, as opposed to, for example, email, yet the FSA says the answer is in how data is stored over the internet rather than use of the internet itself.
Firms can use the internet and their websites if they meet three criteria: customers must be able to use the website, it must permit the storage of information personally addressed to the customer, and the service must allow “unchanged reproduction of the information”.
On the issue of “expert customers”, the FSA says it has decided in favour of those who wish to retain an opt out route for private customers who want the protection of the DMD, but without losing any advantages than an opt out may provide.
The FSA is equally unequivocal in its proposal that customers must be provided with full DMD information before any 14- or 30-day cancellation period starts.
However, the rules on providing information will be different for friendly societies, which the FSA says do not need to provide copies of their membership rules with direct offers in order to meet DMD requirements.IFAonline
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