Publication: Czech Republic : Technical Note on Consumer Protection in Financial Services
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Date
2007-06
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2007-06
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This Technical Note has been prepared by the World Bank at the request of the Ministry of Finance of the Czech Republic and is the first in a pilot series of financial consumer protection assessments focus on consumer protection in several parts of the financial sector including banking, consumer finance, insurance, private pensions and collective investment funds. The assessments attempt to identify key components of strong consumer protection in financial services and stimulate debate on what reforms may be needed.
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“World Bank. 2007. Czech Republic : Technical Note on Consumer Protection in Financial Services. © World Bank. http://hdl.handle.net/10986/12924 License: CC BY 3.0 IGO.”
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Publication Armenia : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 1. Key Findings and Recommendations(Washington, DC, 2012-06)The objectives of the diagnostic review of consumer protection and financial literacy for Armenia are: (i) to assess the existing financial consumer protection framework, by reviewing laws, regulations and practices in Armenia compared to international good practices; and (ii) to provide recommendations on ways to improve consumer protection and financial literacy in Armenia. The review provides a detailed assessment of the institutional, legal and regulatory framework in four financial segments, namely banking, non-bank credit institutions, securities, and insurance. Many key steps have already been taken in financial consumer protection, especially at the regulatory and institutional levels. Regarding the institutional framework, adequate resources need to be allocated to the consumer protection team and modern supervisory tools should be made available. Consumer organizations should be strengthened and motivated to assist the Central Bank of Armenia (CBA) in market monitoring. In terms of consumer disclosure, the CBA should issue regulations that require financial institutions to provide clear, understandable, timely, comparable and standardized information to consumers. In the area of regulation of business practices, the CBA should require that sales agents are well trained and should test them regularly. All financial institutions should regularly analyze the complaints received and the analysis should be provided to the CBA. The Steering Committee for the National Strategy of Financial Education should become the key body to manage financial education in Armenia.Publication Slovakia : Technical Note on Consumer Protection in Financial Services, Volume 1. Main Report(Washington, DC, 2007-07)As financial markets develop and deepen, one of the key issues for the fair, open and efficient operation of the markets is the protection of consumers rights in financial services. Be they bank depositors or borrowers or investors in insurance policies, securities or investment or pension funds, financial consumers need the ability to accurately understand the terms and conditions of their contracts and take action if the terms of contracts have been violated. The Note is the second report in a pilot program to analyze consumer protection in financialservices.The objectives of the Note are three-fold, to: (1) present a set of draft good practices for assessing consumer protection in financial services; (2) conduct a review of the existing rules and practices in Slovakia compared to the draft practices; and (3) provide recommendations on ways to improve consumer protection in financial services in Slovakia. The Technical Note wasprepared at the request of the Slovak Ministry of Finance, with the valuable support of the National Bank of Slovakia and other government agencies, ministries, and non-government organizations. In the past the World Bank has also prepared governance reviews of the Slovak financial sector for banking and private pension funds. Few guidelines are available for consumer protection in financial services. Consumer protection in financial services remains a new and developing area for which no consensus has developed on the broad parameters against which a specific country might be analyzed. This Note relied on the EU Directives related to consumer protection and the reports of European financialregulatory and supervisory agencies. Other sources were also used. In the United States, the Federal Trade Commission, the Securities and Exchange Commission and other state, federal and self-regulatory agencies have developed laws, rules and guidelines to protect financial consumers. In addition, the 2003 OECD Guidelines for Protecting Consumers from Fraudulent and DeceptiveCommercial Practices across Borders and the 1999 United Nations Guidelines for Consumer Protection served as useful reference points for general consumer protection not related to the financial sector. The recommendations in the Note go beyond the provisions of the EU Directives currently in force. As described in the EU Consumer Protection strategy announced in March 2007 and the April 2007 Green Paper on Retail Financial Services, European financial consumers wouldbenefit from stronger legal and institutional protections than are currently in place. Both in Europe and elsewhere, contemporary thinking on consumer protection is rapidly evolving. The Technical Note takes into account the international discussion on financial consumer protection and evolving good practices in financial consumer protection. Thus, the Note presents recommendations that are applicable to the Slovak financial sector, but in some cases go beyondthe minimum requirements set by EU legislation.Publication Croatia : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 2. Comparison against Good Practices(Washington, DC, 2010-02)As financial markets develop and deepen, one of the key issues for a fair, open and efficient market is effective consumer protection and financial literacy. The European Union takes the approach that an effective regime of financial consumer protection should allow consumers to have access to: sufficient information to make informed decisions about their financial choices; cost-effective recourse mechanisms to redress violations of financial service contracts; and programs of consumer education and financial literacy that empower them to understand their financial rights and obligations. This review has found that the quality of consumer protection in financial services in Croatia has improved in recent years. In particular, the approval of the 2007 Consumer Protection Act incorporated many of the EU Directives related to financial consumer protection. In addition, the National Council on Consumer Protection was established in 2008 to advise the Government on its national strategy for consumer protection in the coming years. A nation-wide baseline survey of financial literacy would provide useful information in designing programs in financial education and consumer awareness. As pioneered in the United Kingdom, financial literacy surveys can identify which part of the population is most vulnerable to financial abuse. The baseline survey should be segmented by age, gender, geographic area, household income, and formal education. After a period of three to five years, a follow-up survey could be done to evaluate the effectiveness of the programs of financial education and consumer awareness.Publication The Impact of the World Bank on the Improvements of Consumer Protection in Financial Services and on Developing Financial Literacy in the Czech Republic and Slovakia(World Bank, Washington, DC, 2010-07-24)This study analyzes the impact of work of the World Bank in the areas of consumer protection in financial services and in improving financial literacy in the Czech Republic and Slovakia, the first two countries where the World Bank provided technical assistance in the areas of consumer protection in financial services and financial literacy. The impulse of the Czech authorities was their understanding that consumer protection was lacking in the area of financial services while the offer and complexity of financial products was growing rapidly in the quickly developing post-communist market. The authorities were dealing with a growing number of complaints from the public as well as increasing media coverage of consumer complaints, while lacking adequate internal expertise to deal with these issues. The World Bank prepared the technical note on consumer protection in financial services for the Czech Republic. After the note was presented publicly at a dissemination seminar in the Czech Republic, authorities of the Slovak Republic requested similar assistance as they were dealing with similar issues. This study describes the impact the pioneering work of the World Bank team had on the Czech Republic and Slovakia, and how it assisted national authorities in improving consumer protection in financial services and developing programs to increase financial literacy of the Czech and Slovak populations.Publication Armenia : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 2. Comparison with Good Practices(Washington, DC, 2012-06)The objectives of the diagnostic review of consumer protection and financial literacy for Armenia are: (i) to assess the existing financial consumer protection framework, by reviewing laws, regulations and practices in Armenia compared to international good practices; and (ii) to provide recommendations on ways to improve consumer protection and financial literacy in Armenia. The review provides a detailed assessment of the institutional, legal and regulatory framework in four financial segments, namely banking, non-bank credit institutions, securities, and insurance. Many key steps have already been taken in financial consumer protection, especially at the regulatory and institutional levels. Regarding the institutional framework, adequate resources need to be allocated to the consumer protection team and modern supervisory tools should be made available. Consumer organizations should be strengthened and motivated to assist the Central Bank of Armenia (CBA) in market monitoring. In terms of consumer disclosure, the CBA should issue regulations that require financial institutions to provide clear, understandable, timely, comparable and standardized information to consumers. In the area of regulation of business practices, the CBA should require that sales agents are well trained and should test them regularly. All financial institutions should regularly analyze the complaints received and the analysis should be provided to the CBA. The Steering Committee for the National Strategy of Financial Education should become the key body to manage financial education in Armenia.
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