The report will hopefully get national supervisors to closely monitor these identified consumer protection issues
2013 EBA Report on Consumer Trends-
Supervisory Concerns Regarding Consumer Protection Issues in 2012/13
Table of contents
Executive summary 4
1. Supervisory concerns identified in 2011 and actions taken in 2012 5
1.1 Indebtedness and responsible credit 5
1.2 Financial literacy and education 7
1.3 Complex savings products 8
1.4 Bank account fees and charges 8
1.5 Unnecessary and unsuitable sales 9
1.6 Impact of technology 10
2. Supervisory concerns in 2012 and the areas of work identified for 2013 11
2.1 Indebtedness and responsible credit 12
2.2 Continuing concerns about the transparency and levels of charges and fees 12
2.3 The scope of mis-selling of financial products 12
2.4 Specific issues concerning certain products – notably foreign currency loans, payment protection insurance and complex products 13
2.5 Continuing concerns about the security of new technologies used for banking services 13
2.6 Emerging new forms of liquidity raising 13
2.7 Issues identified by the Banking Stakeholder Group 14
Executive summary
One of the tasks of the European Banking Authority (EBA) as laid down in Article 9(1)(a) of its founding Regulation is to collect, analyse and report on consumer trends. In compliance with this provision, in February 2012, the EBA published its first report setting out an overview of the EBA’s objectives and work in the area of consumer protection and financial innovation. This report included a summary of the outcomes of a first survey of national competent authorities (NCAs) and aimed at identifying key issues and trends with regard to consumer protection in the EU banking sector. The survey and report also identified a number of issues and products on which the EBA proposed to undertake further work (see http://www.eba.europa.eu/cebs/media/Publications/Consumer%20Protection/EBA-BS-2012-003-Financial-Innovation-and-Consumer-Protection--Overview-of-EBA-work-in-2011-2012.pdf)
Following on from a new survey conducted in the second quarter of 2012, the current report provides an update on this exercise, revisiting the issues, trends and products covered in the Overview of EBA work. It also provides a revised set of consumer issues, trends and products identified as at the end of 2012. The main findings of the survey indicate that indebtedness and responsible lending remain the key concern for the majority of member states. During 2012, a number of member states introduced further requirements/standards to attempt to address these issues. As a result, the EBA is also currently working to produce good practices on responsible lending and on the treatment of borrowers in payment difficulties. Another related area of concern is the level of fees and charges applied to loan repayments or the introduction of new fees and charges, particularly for late repayments. This adds to the burden of the already indebted consumer. Some member states are currently examining whether regulations are required in this area.
In 2011, the impact of technology was highlighted as a concern, an observation which was echoed also in 2012. The main issues relate to security and fraud risks in connection with new banking and payment technologies. It is hoped that initiatives such as the ECB’s SecuPay work in addition to the Payment Services Directive will address these concerns.
Other issues highlighted in this report include the mis-selling of financial products, foreign currency loans and emerging forms of raising liquidity.
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