World Consumer Rights Day: making financial services fairer for European consumers

15 March is World Consumer Rights Day

 In 2011, Consumers International – a global federation of consumer groups – is celebrating the occasion by campaigning for fairer financial services. The European Commission fully supports this objective and is acting on all fronts to give EU consumers a fairer deal in financial services.

Commenting on the occasion, the Internal Market Commissioner Michel Barnier said:

"Financial markets should be at the service of citizens, not the other way around. Europe must make financial services more fair and transparent for consumers everywhere in Europe. This means getting the information you need to make the right decision when taking out a mortgage, making it easy to transfer money from your account to another EU country or getting your money back from your current account if your banks fails."

A lot has been achieved over the last 12 months: the new European supervisory authorities for banks, insurers and markets have started their work and will safeguard consumers from high-risk or toxic financial products. New rules for hedge funds and other alternative investors have been adopted to make sure that they handle assets on behalf of pension funds and other investors in all transparency and responsibility. Also, new rules will apply from 1 July that will give investors the information they need to make the right investment decisions for them.

We will shortly table robust rules for consumer protection when buying mortgages, and we will introduce new laws establishing a universal right to a basic bank account as well as measures to curtail risky investment products for consumers. Meanwhile, our efforts to making financial markets more transparent and responsible will continue: from the stock exchange floor to the board room."

Commissioner for Health and Consumers John Dalli said:

"In recent years, millions of consumers failed to get information and advice which they could understand in relation to their investments. As a result, many made poor investment choices and lost large parts of their savings. This caused a lot of pain in consumers' lives and seriously undermined people's confidence in the financial markets.

Our studies have revealed that consumers are often overpaying for their basic financial services and do not always get effective redress they deserve.

The European Commission has not been passive in the face of this.

For basic financial services, such as current bank accounts, we are working to make sure that contracts make sense for consumers, contain clear information that they can understand and clearly show all the fees and charges. We want consumers to be confident that they can understand and compare the cost of their daily banking services so that they do not pay more than they should. We also want to make it easy for consumers to switch to a better and cheaper bank account if they so wish.

We also want to restore investors' confidence. Following the same model that we have introduced for consumer credit contracts, we have new rules which require the information for investors to be simple and comparable, so that contracts are understood by consumers. They will now have a straightforward sheet of two pages only which will enable them to clearly understand and compare costs, risks and potential yields.

Finally, we are working hard to make out-of-court resolution of consumer disputes faster, more effective and more easily available in the EU. Bodies which help consumers resolve their disputes related to financial services already exist, but we want to help boost their efficiency and coverage. We are now consulting the public on the best EU-wide approach to this".

Background:

World Consumers Day is celebrated each year to mark the historic address made by US President John F. Kennedy on 15 March 1962, in which he was the first world statesman to set out a vision of consumer rights and recognise the importance of consumers as a group.

Internal Market: Financial Services

http://ec.europa.eu/internal_market/top_layer/index_24_en.htm

Consumer Affairs: Financial Services

http://ec.europa.eu/consumers/rights/fin_serv_en.htm