Publication: Slovakia - Technical Note on Consumer Protection in Financial Services : Volume 2 Sectoral Analyses and Good Practice Reviews
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Date
2012-07
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2012-07
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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.
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“World Bank. 2012. Slovakia - Technical Note on Consumer Protection in Financial Services : Volume 2 Sectoral Analyses and Good Practice Reviews. © World Bank. http://hdl.handle.net/10986/11895 License: CC BY 3.0 IGO.”
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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 Slovakia : Technical Note on Consumer Protection in Financial Services, Volume 1. 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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 Islamic Republic of Pakistan : Diagnostic Review of Consumer Protection and Financial Literacy, Volume 2. Comparison with Good Practices(Washington, DC, 2014-03)The diagnostic review for Consumer Protection and Financial Literacy (CPFL) provides a detailed assessment of the institutional, legal, and regulatory framework in four segments of the financial sector: banking, microfinance, securities, and insurance. 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This Working Paper aims to summarize key lessons from reviews of consumer protection and financial literacy in nine middle-income countries of Europe and Central Asia (Azerbaijan, Bulgaria, Croatia, the Czech Republic, Latvia, Lithuania, Romania, the Russian Federation and Slovakia). All the country assessments used a systematic common approach, based on a set of Good Practices for Consumer Protection and Financial Literacy developed by the World Bank's Europe and Central Asia Region. The objective of the Working Paper is to contribute to the international dialog on strengthening financial consumer protection and financial literacy in emerging markets.A financial consumer protection regime should meet three objectives. First, consumers should receive accurate, simple, comparable information of a financial service or product, before and after buying it. Second, consumers should have access to expedient, inexpensive and efficient mechanisms for dispute resolution with financial institutions. Third, consumers should be able to receive financial education when and how they want it. A common challenge among the nine countries is the need of an adequate institutional structure for financial consumer protection. However independent of the specific institutional structures, financial consumers should have one single agency where to submit complaints and inquiries. Financial institutions should be required to apply fair, non-coercive and reasonable practices when selling and advertising financial products and services to consumers. Personal data should also be carefully protected.
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