Consumers for fair, safe and competitive financial services

consumersinternational.org

consumersinternational.org

Is there a crisis with financial consumer protection?• Weak financial consumer

protection a key catalyst of the financial crisis

• An ongoing issue of concern for many consumers in all countries.

• 150 million new consumers of financial services every year

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Is there a crisis with financial consumer protection?High level of risk to the consumer justifies more effective regulation.• Complex products• Many ‘one-off’ decisions • Rapidly changing market• Major long term impacts

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The international response?

Global nature of the problem justifies an international solution, however:• G20 - very little reference to

consumers• International co-operation is very

limited• World Bank work is an exception

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CI campaign on Financial Consumer Protection

Call for the G20 to establish an Experts Group on:• Contracts and charges• Information design and disclosure• Gov. and functions of FCP bodies• Competition• Ongoing international co-operation

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Contracts and charges

• Restrict excessive complexity• Consumers should be able to review

contracts before signing• Consumer protections should be non-

waivable.• Fees and costs should be fair and

reasonable

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Information design and disclosure

• Information should be comprehensive, pertinent, transparent and designed to meet consumer needs

• There should be regular statements on the performance of the products

• Financial service providers should provide full disclosure to relevant regulators

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Financial consumer protection bodies

• Independence from FS industry and a balance of consumer and industry expertise.

• The right to develop appropriate regulations, conduct investigations, require changes in policies and practice and require appropriate redress.

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Competition

• Promote the ability of consumers to ‘switch’ providers.

• Protection against ‘tying in’.• Low barriers to entry• Innovation• Breaking up the banks?

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International co-operation

• Regulators around the world face similar challenges

• There are international bodies for insurance, securities, pensions but not financial services

• The current loose network needs to be given the resources to do an effective job.

G20 activities

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consumersinternational.org

G20 Seoul Action Plan

Enhancing consumer protection: we asked the FSB to work in collaboration with the OECD and other international organisations to explore, and report back by the next summit, on options to advance consumer finance protection through informed choice that includes disclosure, transparency and education; protection from fraud, abuse and errors; and recourse and advocacy.

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Next steps

• CI and members’ involvement in the FSB process

• French presidency of the G20• International standards (ISO)• Competition • Financial inclusion

www.consumersintenational.org

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