Tuesday, 14 October 2008

Consumer protection must be centre stage in financial crisis

From Justin Macmullan, Head of Campaigns, Consumers International:

As the world holds its breath and hopes that the financial packages brokered by the leading industrial nations can stave off the worst consequences of a global recession, it is the impact on consumers, rather than business that should take centre stage.

Whether it’s safeguarding personal savings, accessing credit, paying a mortgage or protecting a pension, it’s consumers who will end up feeling the true brunt of any downturn in the global economy. And, if some of the bleaker predictions prove true, the crisis may well move beyond consumer savings and investments and affect basic services such as energy provision, healthcare, transport infrastructure and food prices. As a result, many consumers who have never held a bank account or owned a house would then be affected.

This crisis is the failure of an excessively deregulated free market, and governments must now step in to protect the consumer. This should be rapidly followed with effective global measures to restore responsibility, accountability and transparency to financial markets. Consumer protection must be put above short-term corporate profit.

Download the full CI statement on the financial crisis.

1 comment:

  1. The global financial sector is defintely a wake up call for governments in respect of the traditional minimum regulatory approach that has been applied to governance of that sector.

    In the Caribbean, for whatever reason, several consumer protection laws have excluded money and securities from the definition of goods, thereby excluding their regulation under framework consumer protection laws.

    In light of the current crisis, Caribbean governments will need to determine whether or not Deposit insurance is an adequate mean of safeguarding consumers' interest in a sector that:
    1. imposes inexplicaple user fees and charges, without notice
    2. takes careless risks with depositors/investors money
    3. has no code of practice or guaranteed standards of service.