Banking and financial canvassing, the practice of soliciting potential customers outside traditional branches, is an activity that is strictly regulated by law to protect savers. Given the proliferation of offers and the complexity of the products on offer, it is essential to understand the framework governing these practices in order to avoid pitfalls and make informed decisions. This article provides an overview of the basic rules governing direct marketing. To navigate this regulatory environment with confidence, the assistance of a professional can prove decisive. You can consult the expertise of our lawyers in banking and finance for tailor-made support.
Introduction to banking and financial canvassing
Definition and purpose of canvassing
Banking or financial canvassing is defined as any unsolicited contact with a person, by whatever means, with the aim of obtaining an agreement for a banking or financial transaction. This includes visits to the home, workplace or any other place not intended for the marketing of financial products. The main aim of these regulations is to ensure the protection of those canvassed, who are considered to be potentially vulnerable non-professionals. This framework is designed to guarantee their informed consent and preserve the integrity of the market, in line with mechanisms to protect customers in the event of default by financial institutions.
Changes to the legal framework
Historically, canvassing was governed by scattered legislation. The Financial Security Act of 1 August 2003 marked a major turning point by unifying the legal regime. The aim of this reform was to modernise and strengthen investor protection by adapting it to new marketing techniques and the growing complexity of financial products. Subsequent decrees and orders, notably on distance marketing, have completed this foundation.
Structure of current regulations
Today, all the rules applicable to canvassing are mainly codified in the Monetary and Financial Code. This is the central reference that defines the scope of the activity, the players authorised to carry it out, their obligations and the penalties for non-compliance. This centralisation makes it easier to understand the rights and duties of each party.
Scope of the regulations
Transactions covered by canvassing
The regulations apply to a wide range of transactions. These include proposals for the provision of investment services, such as portfolio management on behalf of third parties, banking transactions such as loans or the receipt of funds from the public, and the subscription of financial instruments. The latter include shares, bonds and units in collective investment schemes. The emergence of new assets is also having an impact, as illustrated by the regulation of crypto-assets and their implications for financial instruments.
Exclusions from the scope of application
Certain situations fall outside this strict framework. In particular, the law excludes contacts with "qualified investors" or "professional clients", who by definition have the skills and knowledge needed to assess risk. Similarly, solicitations to large companies exceeding certain balance sheet thresholds are not subject to these rules. Lastly, a discussion that takes place in a bank branch or any other of the institution's usual sales outlets is not considered to be canvassing.
Products strictly prohibited from direct marketing
To protect savers from excessive risk, the law formally prohibits direct marketing of certain products deemed to be particularly dangerous. This blacklist includes financial instruments that are not admitted to trading on a regulated market or a multilateral trading facility. Also banned are products where the maximum risk is not known at the time of subscription or is greater than the amount of the initial investment, such as certain types of speculative financial contracts.
Canvassing conditions
Categories of authorised persons
Canvassing may only be carried out by specifically authorised entities and individuals. These are mainly credit institutions, investment firms and financial investment advisers (FIAs). The latter must act under a clear mandate issued by a financial institution. Any other player engaging in this activity would be doing so illegally.
Conditions of authorisation
To be eligible to canvass, individuals must meet a number of strict requirements. They must be of good character and age, which means that they must not have been convicted of any criminal offence. In addition, professional competence is required. This can be demonstrated by a diploma, sufficient professional experience or specific training. Finally, professional indemnity insurance is compulsory to cover any damage caused by negligence.
Formalities
Authorisation is not enough. The direct seller must be registered on a national register of authorised persons, such as the single register managed by ORIAS, which can be consulted by the public. This registration guarantees traceability and compliance. In addition, the employer (the principal) must issue the canvasser with a canvassing card. This document, which must be presented to any person canvassed, certifies the identity of the agent, the principal and the extent of the agent's authorisation.
Rules applicable to doorstep contracts
The conclusion of a contract following canvassing is subject to specific rules designed to protect the customer's consent until the agreement is finalised. These provisions apply generally, but may be supplemented by specific provisions, as in the case of the specific rules of distance marketing.
The direct seller's duty to inform
Before proposing any product, the direct marketer is obliged to find out about the person's situation. They must assess their investment knowledge and experience, their objectives and their financial situation. This assessment helps to ensure that the products on offer are suited to the customer's profile and needs. This is often referred to as a "suitability test".
Pre-contractual information obligations
The direct seller must provide clear, accurate and not misleading information. This includes their identity, their status, the company they are acting for and the precise characteristics of the product or service they are offering. The costs, fees and associated risks must be explained in a transparent manner. This information must be provided on a durable medium before the contract is signed.
The right of withdrawal
The person being canvassed has a right of withdrawal. They have 14 calendar days in which to cancel their contract, without having to give any reason or pay any penalties. This period runs from the day on which the contract is concluded. There are exceptions, however, particularly for financial products whose value depends on market fluctuations and which may vary during the withdrawal period.
Prohibitions relating to the formation and performance of the contract
To ensure that the right of withdrawal is effective, the law imposes strict constraints. The direct seller may not receive any payment or consideration from the customer until seven days after the conclusion of the financial services contract. Failure to comply with these rules may render the contract null and void, and expose the direct seller to severe penalties, including fines. civil and criminal liability in the event of non-compliance.
The regulations governing direct marketing in banking and finance form a protective shield for savers. Knowing the basic principles is an asset when dealing with industry professionals. However, interpreting the rules and detecting any illegal practices can be complex. Failure to comply with this legal framework can have serious consequences, as detailed in our article on penalties for unlawful canvassing. For an in-depth analysis of your situation and tailored advice, please contact our team atlawyers specialising in banking and financial law.
Frequently asked questions
What defines a financial solicitation?
Canvassing is when a professional makes unsolicited contact with you, outside the usual place of sale, to offer you a banking or financial product or service.
Can I change my mind after signing a contract?
Yes, you have the right to withdraw from the contract within 14 calendar days of signing it. This right can be exercised without reason or penalty for most transactions.
How can I check that a direct seller is authorised to operate?
You can consult the unique register of insurance, banking and finance intermediaries (ORIAS), which can be accessed online. The canvasser must also show you his or her professional canvassing card.
Can all financial products be sold by direct marketing?
No, the law prohibits canvassing for products deemed to be the riskiest, in particular those that are not listed on a regulated market or where the risk of loss may exceed the initial investment.
What should I do if I think I've been the victim of illegal canvassing?
It is recommended that you cease all contact with the person, do not make any transfers and keep all evidence (emails, documents). Contact a lawyer as soon as possible to assess your recourse and consider what action to take.
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