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Empowering Tomorrow’s Consumers
Consumers International World Congress 2011
5 May Hong Kong
World BankGlobal Program on Consumer Protection & Financial Literacy
Sue RutledgeGlobal Coordinator
o Consumer rights awarenesso Financial institutions (or financial industry associations)
could prepare a simple, easy-to-understand brochure about the consumer's legal rights regarding remittances
o Consumer disclosureo Financial supervisory agency could ensure that
comparable information is made available to consumers
o For example, collecting from financial institutions their standard pricing for various types of remittances
o Data should be publicly available in newspapers and internet
Global Map of the Financially Included
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o Equitable growth is undermined by weak financial consumer protection
o Weak financial consumer protection regulation has led to abusive or deceptive practices by some financial providers
o Particular issue for micro-finance (ex. India, Pakistan, Nicaragua, Kazakhstan) but seen throughout formal financial services
o Loss of consumer trust in financial sector reduces household use of formal financial services
o Weak financial literacy increases households’ vulnerability to abusive practices
Part of Global Financial Inclusion Agenda
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o Banking – Precondition of effective banking supervision
o Deposit insurance – Core principle
o Insurance – Core principle
o Securities – Core principle
o Private pensions - Main objective
o International remittances – General principle
o Statutory objective for financial supervisory agencies worldwide:o e.g. Canada, Colombia, Ireland, Malaysia, Singapore, South Africa,
Sweden, UK, US
Part of Global Financial Regulation & Supervision Agenda
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o Launched Global Program on Consumer Protection and Financial Literacy
o Drafted Good Practices on Financial Consumer Protection as assessment methodology
o Published Working Paper -- Consumer Protection and Financial LIteracy: Lessons from Nine Country Studies
o Member of Financial Stability Board Consultative Group on Financial Consumer Protection
o Member of OECD Task Force on Financial Consumer Protection
o Public feedback tool: feedback.consumerprotection.worldbank.org
o Website: www.worldbank.org/consumerprotection
World Bank Contribution
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Strategy for Country Programs
Baseline Household Survey
of Financial Literacy & Consumer Behavior
Action Plan to Implement
Recommendations
Diagnostic Review of Legal
& Regulatory Framework
Implementation Program
Follow-up Household
Survey
Feedback Loop
Input
Implementation Programs
Action Plans
-In pipeline
Household Surveys
-In pipeline
Diagnostic Reviews
-In pipeline
Country Projects Under Preparation
Main Stakeholders
GOVERNMENT• Ministries (e.g. Finance,
Economy, Education)• Public agencies (e.g.
consumer protection, data protection, competition)
• Councils (e.g. consumer protection, education)
FINANCIAL SUPERVISORS
• Financial supervisory agencies
• Central Bank• Financial consumer
protection agency• Compensation
schemes
INTERNATIONAL COMMUNITY
• Donors• Regional organizations• Standard setters• International
associations
REDRESS MECHANISMS
• Ombudsman• Arbitration• Mediation, conciliation• Courts
CIVIL SOCIETY• Consumer
associations• Debt counseling • Foundations• Academia• Media
FINANCIAL INDUSTRY• Industry associations• Training centers• Financial institutions
(incl. distributors)• Financial infrastructure
(e.g. credit bureaus)
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Ins
Banking
Insurance
Private Pensions
Securities
Non-Bank Credit,
incl. MFI
Good Practices for each sector focus ono Consumer disclosureo Business practiceso Complaints & dispute
resolutiono Financial literacy
Credit Reporting
All Formal Financial Services Covered by Good Practices
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Consumer Disclosure
Consumer Disclosure
Business Practices
Consumer Redress
Financial Literacy
- Simple- Easy to understand- Accessible- Comparable
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Helping Consumers Shop Around Makes a BIG Difference
Credit Card Loans Average Interest Rates in Peru
Source: Superintendence of Banking, Insurance and Private Pension Funds of Peru
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Business Practices
Consumer Disclosure
Business Practices
Consumer Redress
Financial Literacy
- Free choice of financial products
- Retail officers trained and qualified
- Unfair, abusive practices prohibited
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Consumer Redress
Consumer Disclosure
Business Practices
Consumer Redress
Financial Literacy
- Financial institutions complaints departments
- Financial ombudsman
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Financial Literacy
Consumer Disclosure
Business Practices
Consumer Redress
Financial Literacy
Broad-based programsGovernmentFinancial industryNGOs
Targeted initiativesTeachable
momentsWorkplaceMass mediaYoung adults
Unbiased informationRegulatorsConsumer
associationsConsumer ConsultationImpact Measurement
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Consultation Process for Draft Good Practices
• Consultative Draft of “Good Practices for Financial Consumer Protection” available at www.worldbank.org/consumerprotection
• Public comments and suggestions feedback.consumerprotection.worldbank.org
• Direct comments and feedback to Sue Rutledge at [email protected]
• Comments due by June 30, 2011
Empowering Tomorrow’s Consumers
Consumers International World Congress 2011
May 5 Hong Kong
World BankGlobal Program on Consumer Protection & Financial Literacy
Sue Rutledge - Global [email protected]
