Wednesday, 8 June 2011

Finally, consumers are being heard on financial protection: Robin Simpson

CI’s senior policy adviser, Robin Simpson, reflects on the growing influence of the consumer movement within the global debate on financial services.

Robin Simpson at CI World Congress 2011
CI must be doing something right. On Thursday 9 June we are invited to the Gilded Gallery of the Banque de France in Paris to present our views on measures for consumer protection in financial services as set out in our 2011 World Consumer Rights Day publication:

The invitation came from the Comite Consultatif du secteur financier, the independent consultative committee on financial services which brings together industry and consumers (64 members in all) under the same roof on an equal basis. Our French members UFC-Que Choisir and Confederation Consommation, Logement et Cadre de Vie both sit on this committee and have argued with some success for reforms such as improved disclosure of terms of credit agreements and bank charges, fairer charging systems. Our colleagues from BEUC (Bureau Europeen des Unions de Consommateurs) will be taking part, so with our French members in the room too we will not be a lone voice for once.

Why us, why now? During 2011 France has the presidency of the G20 which made a commitment to strengthen consumer protection in FS at the 2010 summit in Seoul. The French have taken this commitment seriously and Mme Christine Lagarde the Minister of Finance (and now candidate to take over as head of the IMF) sent a filmed message of support to CI’s World Congress in Hong Kong just last month. 

Thanks to the support of our expert members, CI got off to flying start in putting forward our views early in the year to the OECD and the Financial Stability Board, the two bodies who are jointly charged with preparing the programme of reform.

The first draft of ‘high level principles’ has already been prepared by OECD and we have commented on that welcoming the work so far but highlighting key gaps in relation to tackling the increasing complexity of many financial products, the need to tackle the causes of consumer over indebtedness and the promotion of competition. As the OECD will also be present in the meeting we can comment again! Thanks to the good offices of our French members, we have received the invitation to meet the French presidency and now the consultative committee too.

We have already presented evidence to the joint task force of the OECD and FSB, and to the Consumer Policy Committee of the OECD. And the staff of the OECD and FSB were exposed to the consumer movement in all its glory in Hong Kong when they came to take evidence direct from members in two sessions, the first a closed session of the CI members organisations that contributed to the policy paper and the other, an open meeting, very well attended. 

However, despite these efforts by the secretariats of these international organisations, there is a serious issue regarding the process at national level. A dangerous vacuum has become apparent among the national jurisdictions that make up the G20.

The financial regulators know little about consumer protection; we know that because they have told us so. And the consumer protection agencies are kept away from financial services by their Treasuries and central banks; we know that because they have told us so as well. It was, therefore, not surprising when,  at the Consumer Policy Committee of the OECD, not a single national consumer protection agency raised a question on this issue of financial financial consumer protection... 

So who is speaking for consumers in these international discussions? Well us and BEUC for a start, but we need allies in government. We intend to raise this issue at the Paris meeting on Thursday. So far the French presidency shows every sign of listening.

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