Consumer Protection

The global financial crisis has highlighted the need for more effective measures to protect financial services consumers as they face increasingly sophisticated offers. Publicly available financial information has increased both in quantity and complexity and the pace of change, in terms of the launch of new services and products and the pace of adaptation of financial services to new technologies, has increased dramatically.

The process of creating and maintaining a reasonable level of consumer confidence in financial markets also generates efficiency and stability throughout the financial system and contributes to positive outcomes for both financial institutions and their customers.

In this context, the ASF is concerned with increasing the protection of the financial consumer, assuming, by including it in the organisation's tasks, to contribute to improving the level of financial education of the public. At the level of the Directorate for Public Relations, Petitions and Financial Education, this is achieved by:

  • implementation and promotion of strategies, action plans and recommendations in the field of consumer protection in the financial instruments and investments,
  • insurance and private pensions markets;
  • collecting and analysing data on financial services and their impact on consumers;
  • developing consumer warnings and alerts;
  • monitoring non-compliant activities in the non-bank financial market that may harm consumer interests;
  • assessing the market impact of new financial services and instruments;
  • developing analysis of consumer complaints about financial services and products in the markets supervised, as well as analysis of misleading advertising or
  • misleading or incomplete information;
  • monitoring possible intermediation/service activities by unauthorised firms for retail customers;
  • consumer education activities to help consumers acquire the knowledge and confidence in their own actions to participate fully in the financial market mechanism.

Unbiased and accurate information not only protects consumers, but can allow more consumers access to those segments of the market considered to be reserved for experienced investors. Consumers should not face discriminatory treatment and at the same time have access to products and services that meet their needs. Access to specialised education and advice based on specific needs must be guaranteed to guide consumers through the complexities of financial services and instruments.

According to European Directives and Recommendations (D. 2013/11/EU, R. 98/257/EC, Solvency II), EU Member States must facilitate consumer access to alternative dispute resolution and promote these methods, thus providing a simple, quick and less costly solution for both the consumer and the financial services provider. Mediation, as an ADR (Alternative Dispute Resolution) procedure, responds to the requirements of the European Union, ensuring the resolution of consumer disputes in a fast, efficient, qualitative, confidential, low-cost way, through the intervention of a neutral and impartial third party mediator.
More details about mediation history - LINK

About Financial Education

According to the OECD, the definition of financial education is: "the process by which consumers/investors improve their ability to understand financial products, their concepts and risks, through information, instruction and/or advice provided in an objective manner, build the skills and confidence to consider both the risks and opportunities of financial products, to make informed choices, to know where to turn for support, and to take any other actions effectively with the ultimate goal of achieving financial well-being (balance)."

In the context of the financial crisis, financial education has begun to be recognised as one of the major individual skills in most economies of the world. The underlying reasons for the growing importance of this area include the trend of transferring an increasing range of (financial) risks to consumers, the trend of increasing complexity of financial services, the pace of evolution of financial markets, the growing number of active consumer-investors as well as the recognition of the limits of regulatory/supervisory instruments towards consumer protection. In addition, the consequences of the global financial crisis have demonstrated the negative effects of a low level of financial education for both society as a whole and for financial markets and households.

As a result, both direct consumer protection and financial education have become, or are becoming, complementary tools to prudential regulation and supervision and improving the long-term pattern of consumer behaviour has become a priority in most developed countries. This trend has led to the development of several initiatives in the field of financial education, launched both by governments, regulators and supervisors and by organisations representing civil society, often combined with other consumer protection measures.

As the attention and resources allocated to financial education programmes have increased, so has the focus on ensuring the effectiveness and long-term impact of these programmes. As a result, coordinated programmes and tailored strategies at national or branch level have come to be seen as the best way to ensure the long-term success of financial education measures. However, such initiatives at national level have encountered many challenges, largely due to the low level or problems of communication and cooperation between partners, their low level of involvement, unproductive competition between different entities, lack of financial and human resources needed to develop strategies at this level.

Today, access to financial services education is critical both from the perspective of ensuring consumer protection in a changing market and from the point of view of facilitating the transfer of responsibility from one economic actor to another. In the absence of financial education, the full and informed participation of individuals in the economic system is particularly problematic, and addressing this situation has become a priority at EU level.

As early as 2007, the European Commission issued Communication COM(2007)808, which lists the basic principles for providing quality financial education programmes:

More on the European Commission's Principles for Financial Education - LINK