Consumer confidence has plummeted in recent years, due to the irresponsible practices of the financial industry, encouraged by a lax oversight and ineffective systems.
Thus, the consumer is a direct victim of the so-called – by Stiglitz and other critical economists – information asymmetry, which implies an equal footing with the financial agent, i.e. a strong correlation is found between non-financial information and the user.
In this context, by assuming a significant development of consumers protection we must welcome the adoption of the European Parliament, of this important text (still pending final agreement with the European Union Council to agree the way it must be transposed to the Member States) .
It is indeed a rule that, incorporates and develops the various measures undertaken in recent years to improve consumer protection in financial markets based a greater transparency, improve accessibility, pursue of unfair advertising practices, monitor and prevention of abuse arising from the conflicts of interest or other problems that may arise.
More specifically, we highlight the points of the policy that helps to improve the position of the consumer :
- The consumer must have personalized pre-contractual information in advance, at least 7 days prior to the time of signature, make it clear, understandable, and comparable enough.
- It requires Member States to impose high levels of requirements and adequately supervise the work of all agents to ensure objective assessments and appropriate counselling, preventing negatively the interests of consumers, as has happened so often.
- In general, prohibiting tied selling practices. Furthermore, in the case of products linked with justification (eg insurance policy on the continent), the consumer will have the opportunity to choose their own supplier.
- Flexibility rules will be introduced in the payment preventing unfair penalties. Also calls upon Member States to promote sensible solutions for breach contract terms by the consumer, proposing solutions to increase flexibility.
- It will promote consumer financial education and good practices to increase their financial awareness.
In summary, we welcome this first step, but only at the time of its effective implementation in each Member State. We will evaluate the practical benefits however; there are too many issues that remain poorly defined.