Following the G20 meeting of world leaders on 3-4 November, consumer groups have welcomed the move towards stronger protection for consumers in the financial services.
The meeting of the major world economies discussed measures to halt the downturn in the world economy and promote global financial stability.
While the eurozone crisis is still a cause for concern, the G20 world leaders endorsed some of the recommendations made by the Financial Stability Board (FSB) and the OECD, including integrating consumer protection into regulation.
Cannes Summit final declaration
The financial crisis has shown how poor standards of consumer protection can spread instability throughout the international financial system.
Which? has been working with consumer groups across the world and the umbrella organisation, Consumers International, to argue for these changes.
A statement from the Cannes Summit final declaration states: ‘We agree that integration of financial consumer protection policies into regulatory and supervisory frameworks contributes to strengthening financial stability.’
Three commitments are particularly good news for consumers:
1. International consumer protection organisation
World leaders agreed on the development of a new international organisation to support financial consumer protection in banking and credit.
FinCoNet, the network of national regulatory authorities, are due to meet to discuss how the organisation can develop from its network of expertise.
2. Accountability for financial protection
Agreement was reached on the need to establish a well-resourced and clearly accountable set of national institutions responsible for financial protection.
3. Risky and unfair financial products
Leaders have agreed that regulators should take further action to define risky and unfair financial products. This could include tackling conflicts of interest from commission payments and ensuring simpler financial products are available.
Which? has been working with Consumers International over the years to champion consumer protection in the financial services. Over the last 14 months, Consumers International members have written to governments in every G20 country.
Ahead of the G20 summit, Which? chief executive, Peter Vicary-Smith, wrote to Prime Minister David Cameron to urge him to ‘take the lead internationally and raise the level of ambition on consumer protection in financial services.’
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