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Wrote this in 2007 seems fairly correct still so i thought i would put it here
Distance marketing
Distance marketing has been with us now since October 2004 but has not really become the object of much discussion on here; I think many of us just kept our heads down and hoped it would go away, just another complication.
There is a general confusion about what exactly it is and how it will affect the good old CCA1974 I have attempted to show here the situation as i understand it.
Firstly the distance marketing regulations are a completely different animal to the distance selling regulations
Distance selling (from the distance selling regulations 2000 updated in 2006) relates to any transaction or purchase that does not involve credit so direct sales made by distance means, mail order by the internet, mobile phone
and other hire services are covered by this.
The Distance Marketing Directive is applied to agreements that are covered by the Consumer Credit Act 1974
The official definition is” As is defined in Reg 1(2) of the Information Regulations as any regulated agreement made under an organised distance sales or service-provision scheme run by the creditor or owner (or by an intermediary of the creditor or owner) who, in any such case, for the purpose of that agreement makes exclusive use of one or more means of distance communication up to and including the time at which the agreement is made.”
The two main differences between distance and conventional credit agreements are the cancellation clauses and the pre-contractual information we will get to this in a bit.
Firstly let’s look at who the new regulations apply to. The distance marketing regulations apply to anyone who executed a credit agreement after 31st October 2004 and did so without any direct contact with the creditor. This is not a simple as it sounds because it conflicts with the definition.
The common consensus is that any agreement made after that time that meets the criteria is a Distance contract and applicable for all its cancellation rights.
The official definition says “made under an organised distance sales provision” which would infer that it would only apply to a contract that was a purpose built distance contract, but the opinion of the OFT is that any agreement made after 31st October 2004, that was made without any physical contact is a Distance Contract.
The reason for this is that there is no definition of the term “under an organised sales provision” so it is taken to mean any sales.
This means that all the Credit Card applications or on line Agreements that have been made after this date, that you thought didn’t have any cancellation rights due to section 67 of the Consumer Credit Act, will have had a 14 day cancellation period under the Distance Marketing Regulations.
You may know I am very wary of anything the OFT tell me but this does seem to be the case and is referred to in several articles I have read on the subject.
Now if we go back and look at what the cancellation rights are under a distance contract. The DMD regulations say that you get 14 days from conclusion day that is either the day you sign or the day you receive the last piece of pre-contractual information (T and C’s) the T and Cs are usually with the contract so it is usually the former simple as that.
This means that the copy 2 that must be sent after the creditor executes the agreement in a CCA would not be necessary in a DMD agreement.
As a consequence of this it is possible to conduct and execute a DMD over the phone (unlike a CCA agreement) there is a shortened version of the schedule 1 information (Schedule 2) that can be used for this but the debtor must get a full copy of the schedule 1 in plenty of time to be able to cancel if they so wished after completion.
If we look at cancelability from the aspect of the consumer credit act, any agreement signed without prior face to face contact was uncancellable, well now it is via the DMD.
An interesting consequence of the above is the effect on debtor creditor supplier agreements made after 2004. The initial version of the description of this directive did not contain the bracketed ,”or of a intermediary of the creditor only” in it, so for instance car dealerships who sold on credit would be subject the directive, since the debtor would have no face to face contact with the creditor(finance provider).
If the car is sold on HP the seller is the hire purchase company and the dealer is an intermediary of the seller not the credit provider so in theory these are covered even if the agreement is signed at the trader’s premises and therefore are cancellable under the DMD. This has to my knowledge yet to be proven in court but most dealers are amending their agreements to adopt the cancellation rights on the DMD.
The only agreements that you could say are uncancellable are those none distance contacts signed on the creditor’s premises or secured on land (mortgages).
As stated earlier the bulk (cancellation periods and some of the pre-contractual stuff) of the Distance Marketing regulations came into force on October 2004.
The full implementation of the directive and all the pre-contractual requirements however did not come into full force until 31st May 2005. The reason for this was that this was the date the amended agreement regulations came into force (2004/1482) and with them the new concept of pre-contractual information for none distance contracts embodied in the 200/1481 S.I(There are transitional details of this in section29 of the DMD.
This delay allowed these two sets of information to be released at the same time thus simplifying the guidelines for the issuance and formatting given to creditors.
The pre-contractual information given should be the information listed in schedule 1 of the DMD it should be on a separate sheet to the agreement and contain no other writing and headed pre-contract information.
There are still a lot of grey areas in the implementation of the directive that will only be resolved through future litigation and subsequent case law. As far as we are concerned I think if in doubt as to weather an agreement is covered by the DMD we should argue that it is and let the creditor try and prove it isn’t.
Best regards
Peter
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Distance marketing
Distance marketing has been with us now since October 2004 but has not really become the object of much discussion on here; I think many of us just kept our heads down and hoped it would go away, just another complication.
There is a general confusion about what exactly it is and how it will affect the good old CCA1974 I have attempted to show here the situation as i understand it.
Firstly the distance marketing regulations are a completely different animal to the distance selling regulations
Distance selling (from the distance selling regulations 2000 updated in 2006) relates to any transaction or purchase that does not involve credit so direct sales made by distance means, mail order by the internet, mobile phone
and other hire services are covered by this.The Distance Marketing Directive is applied to agreements that are covered by the Consumer Credit Act 1974
The official definition is” As is defined in Reg 1(2) of the Information Regulations as any regulated agreement made under an organised distance sales or service-provision scheme run by the creditor or owner (or by an intermediary of the creditor or owner) who, in any such case, for the purpose of that agreement makes exclusive use of one or more means of distance communication up to and including the time at which the agreement is made.”
The two main differences between distance and conventional credit agreements are the cancellation clauses and the pre-contractual information we will get to this in a bit.
Firstly let’s look at who the new regulations apply to. The distance marketing regulations apply to anyone who executed a credit agreement after 31st October 2004 and did so without any direct contact with the creditor. This is not a simple as it sounds because it conflicts with the definition.
The common consensus is that any agreement made after that time that meets the criteria is a Distance contract and applicable for all its cancellation rights.
The official definition says “made under an organised distance sales provision” which would infer that it would only apply to a contract that was a purpose built distance contract, but the opinion of the OFT is that any agreement made after 31st October 2004, that was made without any physical contact is a Distance Contract.
The reason for this is that there is no definition of the term “under an organised sales provision” so it is taken to mean any sales.
This means that all the Credit Card applications or on line Agreements that have been made after this date, that you thought didn’t have any cancellation rights due to section 67 of the Consumer Credit Act, will have had a 14 day cancellation period under the Distance Marketing Regulations.
You may know I am very wary of anything the OFT tell me but this does seem to be the case and is referred to in several articles I have read on the subject.
Now if we go back and look at what the cancellation rights are under a distance contract. The DMD regulations say that you get 14 days from conclusion day that is either the day you sign or the day you receive the last piece of pre-contractual information (T and C’s) the T and Cs are usually with the contract so it is usually the former simple as that.
This means that the copy 2 that must be sent after the creditor executes the agreement in a CCA would not be necessary in a DMD agreement.
As a consequence of this it is possible to conduct and execute a DMD over the phone (unlike a CCA agreement) there is a shortened version of the schedule 1 information (Schedule 2) that can be used for this but the debtor must get a full copy of the schedule 1 in plenty of time to be able to cancel if they so wished after completion.
If we look at cancelability from the aspect of the consumer credit act, any agreement signed without prior face to face contact was uncancellable, well now it is via the DMD.
An interesting consequence of the above is the effect on debtor creditor supplier agreements made after 2004. The initial version of the description of this directive did not contain the bracketed ,”or of a intermediary of the creditor only” in it, so for instance car dealerships who sold on credit would be subject the directive, since the debtor would have no face to face contact with the creditor(finance provider).
If the car is sold on HP the seller is the hire purchase company and the dealer is an intermediary of the seller not the credit provider so in theory these are covered even if the agreement is signed at the trader’s premises and therefore are cancellable under the DMD. This has to my knowledge yet to be proven in court but most dealers are amending their agreements to adopt the cancellation rights on the DMD.
The only agreements that you could say are uncancellable are those none distance contacts signed on the creditor’s premises or secured on land (mortgages).
As stated earlier the bulk (cancellation periods and some of the pre-contractual stuff) of the Distance Marketing regulations came into force on October 2004.
The full implementation of the directive and all the pre-contractual requirements however did not come into full force until 31st May 2005. The reason for this was that this was the date the amended agreement regulations came into force (2004/1482) and with them the new concept of pre-contractual information for none distance contracts embodied in the 200/1481 S.I(There are transitional details of this in section29 of the DMD.
This delay allowed these two sets of information to be released at the same time thus simplifying the guidelines for the issuance and formatting given to creditors.
The pre-contractual information given should be the information listed in schedule 1 of the DMD it should be on a separate sheet to the agreement and contain no other writing and headed pre-contract information.
There are still a lot of grey areas in the implementation of the directive that will only be resolved through future litigation and subsequent case law. As far as we are concerned I think if in doubt as to weather an agreement is covered by the DMD we should argue that it is and let the creditor try and prove it isn’t.
Best regards
Peter
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