Wie kann die EU Verbrauchern zu besseren Finanzdienstleistungen verhelfen?

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1 Justice and Consumers Wie kann die EU Verbrauchern zu besseren Finanzdienstleistungen verhelfen? Wirtschaftskammer Österreich Bundessparte Bank und Versicherung Wien, Ralf Jacob European Commission DG FISMA D3 Retail Financial Services and Payments

2 Action Plan on Retail Financial Services Aim: Give consumers access to more choice and better financial services by addressing the fragmentation of the European market for consumer financial services In 2016, only 7% of consumers purchased a financial product from another country Fragmentation of the financial services market limits consumer choice and keeps prices high Online provision of services enables crossborder sales 2

3 Action Plan on Retail Financial Services Green Paper published in December 2015 The conclusions from the public consultation were made public in Autumn 2016 Communication on Retail Financial Services Action Plan published on 23 March

4 Action Plan of the Retail Financial Services Increasing consumer trust and empowering consumers Reducing legal and regulatory obstacles affecting firms in crossborder sales Taking advantage of new technologies 4

5 Scope of Actions in the Action Plan - 1. Lower charges on non-euro transactions - 2. Transparency in currency conversion - 3. Easier product switching - 4. Quality comparison websites - 5. Better motor insurance - 6. Transparent pricing in car rentals 5

6 Scope of Actions in the Action Plan cont Deeper Single Market for consumer credit - 8. Fair consumer protection rules - 9. Better creditworthiness assessments FinTech for retail financial services Digital identity check Online selling of financial services - 6

7 Action 1. Lower charges on non-euro transactions Problems: - Fees for cross-border and national payments in euro within the EU are already equal (Regulation on cross-border payments - Regulation (EC) No 924/2009) - But fees for cross-border payments in non-euro currencies are still much higher than internal ones 7

8 Action 1. Lower charges on non-euro transactions Action to be taken: - Propose amendment to the Regulation on cross-border payments to reduce charges for cross-border transactions in all Member States. Work done to date: - public consultation ended on 30/10. - study an external contractor on prices and costs - impact assessment and legislative proposal in Q

9 Action 2. Transparency in currency conversion Problems addressed: - Lack of transparency for consumers when they pay in foreign currency - Dynamic currency conversion (choice between paying in local or in foreign currency) too often to the detriment of consumers? 9

10 Action 2. Transparency in currency conversion Actions to be taken - Review of good and bad practices in dynamic currency conversion - Topic covered in the consultation as for Action 1 - just launched a call for tender through CHAFEA to carry out a 'mystery shopping' study to understand what is the current state of the Dynamic Currency Conversion market - On the basis of outcome of this study, considering the most appropriate means to allow consumers to choose the best exchange rate - Second payment services directive requires transparency: is enforcement sufficient? 10

11 Action 3. Easier product switching Problems - Consumers rarely change providers of financial services. - Switching is addressed in Payment Accounts Directive, but more general solutions are needed - Difficulties may be due to: - complex contractual terms imposing high switching and exit fees - or lack of information on product alternatives 11

12 Action 3. Easier product switching State of play: - Exploring steps to make it easier for consumers to switch to more advantageous retail financial services - call for tenders through CHAFEA have just been published to carry out a study investigating legal and commercial barriers preventing consumers from switching products. - In parallel the Commission's Joint Research Centre will analyse the behavioural factors influencing consumers decision to shop for products and switch, including some behavioural testing of possible remedies. - The final results are expected by the end of On the basis of the outcome, the Commission will assess whether to carry out further actions 12

13 Action 4. Quality comparison websites Problem: - Link with Action 3: Consumers need to have access to trustworthy comparison tools to be able to compare and switch financial services products 13

14 Action 4. Quality comparison websites previous work on general comparison websites Market study published in March 2015: comparison websites are used by 74% of consumers, but concerns about transparency and impartiality of information 2016: Development of principles for comparison tools based on UCPD (Directive 2005/29/EC): Impartiality of comparison and identification of advertising within information Transparency about business model Accurate information, also on price and availability Methodology for data collection and ranking Authenticity of user reviews Display of contact details 14

15 Action 4. Quality comparison websites parallel work on Payments Accounts Directive Directive 2014/92/EU obliges Member States to set up as of end 2018 comparison websites for the most representative services linked to accounts (list to be established end 2017/2018 after adoption of delegated acts). Principles for websites: Operationally independent Clearly disclosing owners Setting out clear criteria for comparison Information being clear, accurate, up to date Include a broad range of payment accounts (or information about incompleteness) 15

16 Action 4. Quality comparison websites actions in progress - Work on different types of financial services (consumer credit, insurance) - Identification of other guidance/best practices for comparison websites for financial services (UK CMA report) - Identification of relevant websites - Tailoring of general principles to financial services - End of first half of 2018: a meeting with website owners to inform them about principles and ask to implement them. 16

17 Action 5. Better motor insurance Problems addressed: - No harmonised compensation mechanism in a cross-border situation if an insurer becomes insolvent. - Claims history statements are often not taken into account (problem of portability of no-claim bonuses). 17

18 Action 5. Better motor insurance Actions to be taken: - Review of the Motor Insurance Directive - Directive 2009/103/EC - with respect of protection of traffic accident victims and to improve the cross-border recognition of claims history State of play: - A consultation ended on 20/10/ Commission services currently analysing responses and working on the Impact Assessment. 18

19 Action 6. Transparent pricing in car rentals Problems addressed: - Lack of transparency in the prices of waivers and insurance products proposed to consumers. - Lack of information about the characteristics of these products: coverage, exemptions, terms and conditions, etc. 19

20 Action 6. Transparent pricing in car rentals state of play 2014: agreement between Consumer Protection Cooperation Network and car renting companies (Leaseurope, Avis-Budget, Enterprise, Europcar, Hertz, Sixt) to improve clarity on prices, terms and conditions, fuel and insurance policy, assessment of damages and additional payments A study was completed in Autumn 2017 to check compliance with legislation and with commitments taken by companies. Results to be discussed in one of the next meetings of CPC Committeee. 20

21 Action 7. Deeper Single Market for consumer credit Part I: crossborder provision Problems addressed: - Evolution of the market: new types of products becoming available - Absence of harmonised registration/authorisation and supervisory requirements for consumer credit providers impedes the cross-border provision of consumer credit - Uncertainty for consumers and lenders as to which requirements apply and who the supervisor is 21

22 Action 7. Deeper Single Market for consumer credit Part I: crossborder provision - actions In the coming months: stakeholder meetings to understand barriers to the cross-border provision of consumer credit such as: - Consumer preferences (language, proximity, lack of information what to do in case of problems, lack of access to information) - Businesses wishing to be active only in certain Member States - Difficuties in managing cross-border credits (checking identity, assessing creditworthiness, difficulties of money collection in case of non payments) 22

23 Deeper Single Market for consumer credit Part II: overindebtedness Problems addressed: - around 10% of European households are over-indebted to a large extent (although not only) due to credit activities - low-income households are very vulnerable, as economic shocks quickly lead them to unsustainable debt burden and economic distress; - unpaid debts are problematic both for debtors and creditors; as a result, helping debtors is beneficial also for creditors 23

24 Action 7. Deeper Single Market for consumer credit Part II: overindebtedness Actions to be taken: - facilitate the exchange of best practices in the area of debtadvice services and ensure their generalised availability for all EU households - Identify the main elements in the area of credit that most contribute to cause or aggravate households' overindebtedness and the possible remedies 24

25 Action 8. Fair consumer protection rules Problems addressed - Some rules of Member States may go beyond EU legislation - This may distort competition and make cross-border sales more difficult - Differences in national rules make passporting of providers difficult 25

26 Action 8. Fair consumer protection rules Actions to be taken: - Examine national consumer protection and conduct rules to assess whether they create unjustified barriers to crossborder business. - cooperative work with MS in the context of the Expert Group on Free Movement of Capital. 26

27 Action 9. Better creditworthiness assessments Problems addressed: - Over-indebtedness: creditworthiness assessment should effectively limit it - Insufficiency of the rules to assess creditworthiness for consumer credits - Difficulty to assess creditworthiness for cross-border borrowers - Difficult access of foreign creditors to credit databases 27

28 Action 9. Better creditworthiness assessments Actions to be taken: - seek to introduce common creditworthiness assessment principles and standards for consumer credits developing the requirement from Consumer Credit Directive (similar to standards already existing for mortgage credits) - On the basis of standards for creditworthiness assessment, development of a minimum set of data necessary for assessment of creditworthiness to be available from credit registers across borders 28

29 Action 10. FinTech for retail financial services Problems addressed: - EU and Member State legislation and supervisory practices limit FinTechs ability to innovate and to offer services across borders - However, there is a need to combat fraud and counterfeiting of non-cash means of payment - Technical innovation may be beneficial for consumers, but should not increase risks 29

30 Action 10. FinTech for retail financial services Actions to be taken: - Determine which actions are required to support the development of FinTech and a technology-driven Single Market for financial services. Work done to date: - A public consultation focused on FinTechs followed the publication of the Retail Action Plan (carried out through the summer) - A Feedback Statement has been published after summer - A Fintech Action Plan is expected at the beginning of

31 Action 11. Digital identity check Problems addressed - On-line shopping and financial operations require reliable methods to identify a consumer - Consumer identification is also necessary from anti-money laundering perspective 31

32 Action 11. Digital identity check Actions to be taken: - facilitate the cross-border use of electronic identification and know-your-customer portability based on eidas used for public services to enable banks to identify customers Work done to date: - Creation of a multi-disciplinary Expert Group involving experts already sitting in the AML, eidas and Joint ESA Committee to bring together the required expertise to facilitate portability of eid across Europe, while complying with KYC requirements. - On top of these, the new Expert Group will involve industry and consumer representatives. A call for expressions of interest is due to be published at the beginning of

33 Action 12. Online selling of financial services Problems addressed: - Potential new consumer protection risks linked to the digitalisation of financial services (new business models, new channels, new products) - Challenges from a consumer perspective include, inter alia, questions around information disclosure, consent, personalisation, use of personal data, lack of transparency 33

34 Action 12. Online selling of financial services Study is launched to assess impact on consumers of digitalization and distance selling: - mapping providers that market and sell online - mapping techniques used for advertising and selling - assessing theses practices and testing their impact on consumer behaviour. - The study will feed into the evaluation of the Distance Marketing of Financial Services Directive and Consumer Credits Directive in

35 Conclusion Broad range of issues covered, but many actions are only first steps towards full integration of financial services markets. 35