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Consumers Protection

 

For details on the procedures for receiving and settling petitions, forms and working hours, please see section Consumers/Petitions.

The global financial crisis revealed the need for more effective measures to protect financial services consumers, given that they are faced with increasingly sophisticated offers. The information available to the public in the financial field have increased both in quantity and in complexity and pace of change in relation to launching new services and products, and the adaptation pace of financial services to new technologies has grown dramatically.

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

In this context, ASF is concerned with increasing the protection of financial consumers, assuming, by including among the organization’s duties, that of improving the public’s financial education. At the level of Consumer Protection  Directorate, this is achieved by:

  • implementing and promoting strategies, action plans and recommendations in the field of consumer protection on the financial instruments and investments, insurance and private pensions markets;
  • collecting and analysing data relating to financial services and their impact on consumers;
  • development of warnings and alerts for consumers;
  • monitoring non-compliant activities on the non-banking financial market which may affect the interests of consumers;
  • assessing the market impact of the new financial services and instruments;
  • preparing analyses concerning consumer complaints relating to financial services and products on the supervised markets, and analyses on misleading advertisement or presentation of non-compliant or incomplete information;
  • monitoring potential intermediation/services supply activities by unauthorized firms, to retail clients;
  • activities to educate consumers to help them acquire the knowledge and confidence in their own actions, to foster their full participation in the financial market mechanism.

Impartial and accurate information not only protects consumers but it may also grant access to a greater number of consumers to the market segments considered reserved for experienced investors. Consumers should not be confronted with discrimination and, at the same time, they should have access to the products and services that meet their needs. Thus, access to specialized education and counselling, based on specific needs should be guaranteed to guide consumers in the complexity of services and financial instruments.

According to European Directives and Recommendations (D. 2013/11/EU, R. 98/257/EC, Solvency II), the EU Member States should facilitate the access of consumers to alternative settlement of disputes and to promote these methods, thus providing a simple, fast and less expensive solution for both the consumer and the financial services provider. Mediation, as an ADR procedure (Alternative Dispute Resolution), meets the requirements of the European Union, ensuring dispute resolution in the field of consumer protection in a fast, efficient, quality, confidential, low-cost manner, through the intervention of a third party – the mediator – who is neutral and impartial.

About Financial Education

According to OECD, the definition of financial education is as follows: “the process by which consumers/investors improve their ability to understand financial products, their concepts and risks, through information, training and/or advice given in an objective manner, they create the skills and confidence to take into account both the risks and opportunities of financial products, to make informed choices, to know where to go for support and to undertake any other actions efficiently, with the ultimate goal of obtaining financial welfare (balance).”

In the context of the global financial crisis, financial education began to be recognized as one of the major individual skills in most of the world’s economies. The basic reasons for increased importance of this field include the trend to transfer an increasingly large range of (financial) risks to consumers, the increasing trend of the financial services complexity, the evolution pace of financial markets, the increasingly higher number of active consumer-investors and the acknowledgment of the limits of regulatory/supervision instruments in the field of 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 the financial markets and households.

Consequently, both direct protection of the consumer and financial education have become or are about to become complementary instruments for regulation and prudential supervision, and the improvement of the consumer’s long term behaviour pattern 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 by governments, regulatory and supervisory authorities, and by representative organizations of the civil society, initiatives often combined with other consumer protection measures.

As the attention and resources allocated to financial education programs have grown, the attention to ensuring the effectiveness and long-term effects for these programs also increased. Accordingly, coordinated programs and customized strategies at a national level or by services branch, began to be considered the best solution for ensuring the long-term success of the measures in the field of financial education. However, such initiatives at a national level encountered many challenges, largely because of the low level of, or the problems in, the communication and cooperation between partners, their low degree of involvement, unproductive competition between the different entities, and the lack of financial and human resources necessary for the development of strategies of this level.

At present, access to education in the field of financial services is critical both in terms of ensuring consumer protection in the context of an ever-changing market, and in terms of facilitating the transfer of responsibility from one economic actor to the other. In the absence of financial education, total and informed participation of individuals in the economic system is particularly problematic, resolving this situation becoming a priority at EU level.

Since 2007, the European Commission issued Communication COM (2007) 808, which enumerates the basic principles for the provision of quality financial education programs:

The Principles of the European Commission in the Field of Financial Education


Principle 1: 
      
Financial education should be available and actively promoted at all stages of life on a continuous basis.      

Principle 2:

 Financial education programmes should be carefully targeted to meet the specific needs of individuals.

Principle 3:

 Consumers should be educated in economic and financial matters as early as possible, from school age.
Principle 4:  Financial education programmes should include general tools to raise awareness of the need to improve  understanding of financial issues and risks.


Principle 5:

                    
 When services suppliers provide financial education, it should be fair, transparent and objective. The  consumers’  interests should always be considered, in compliance with the legislation in force, without  resorting to unfair  commercial practices.
Principle 6:
 Financial education trainers should be given appropriate training and the necessary resources to be able to  carry out effective and reliable financial education programmes.

Principle 7:  National coordination between stakeholders should be promoted among the stakeholders to obtain a clear    definition of the roles, in order to facilitate experience exchange and to rationalize and create a hierarchy  of the resources. International cooperation between financial education providers should be enhanced to  acilitate   the exchange of best practices.

Principle 8:

 Financial education suppliers should regularly evaluate and, where necessary, update the programs they      manage, so that they are consistent with the best practices in the field.