Joint ESAs Consumer Protection Day
Date: 25/06/2013 12:00
Location: Paris

​​​The first "Joint ESAs Consumer Protection Day" was held on 25 June 2013 in Paris.

The "Joint ESAs Consumer Protection Day" is an initiative by the “Joint Committee", which is a forum established on 1 January 2011, with the goal of strengthening cooperation and ensuring cross-sectoral consistency between the European Banking Authority (EBA), European Insurance and Occupational Pensions Authority (EIOPA) and European Securities and Markets Authority (ESMA), collectively known as the three European Supervisory Authorities (ESAs).

Consumer protection is of core interest to the ESAs and together with the Joint Committee, the ESAs will continue giving it high priority in 2013. The objective of the event was to provide a forum for exchange and discussion on important consumer issues as well as on consumer protection supervisory practices.

The "Joint ESAs Consumer Protection Day" attracted around 250 consumer representatives, academics, legal and financial consultants, national supervisors, experts from the EU institutions and financial services industry (banking, securities, insurance and pensions).

In his opening speech Gabriel Bernardino, Chairman of EIOPA and the current Joint Committee Chair, called for regulatory consistency across the three financial sectors and urged the application of sound conduct of business practices by market participants. He also spoke about the emergence of a new paradigm on transparency and fairness towards consumers. “In order to regain trust and confidence by consumers, financial institutions need to develop simpler and more understandable products, devote further attention to the fairness of contractual conditions and definitely they need to review the charges and commissions applied ensuring that they are not disproportionate", he said.

During the panel discussion on PRIPs (proposal for a ‘Regulation on key information documents for investment products’) participants discussed the scope of the proposal together with considerations as to personalise the so-called Key Information Document enabling comparison between covered products (e.g. by including national information on tax implications). The importance of behavioural finance in product disclosure was also addressed and views were shared on which kind of information consumers generally need in order to take informed decisions on whether to buy or not to buy a product.

Different break-out sessions on consumer trends and financial innovation, sales incentives and product intervention were held.

In this respect, the panellists discussing consumer trends, agreed that the ESAs need enhanced data collection powers to ensure data of quality with a view to continuously collect, analyse and report on consumer trends. The usefulness of comparison websites and payment protection instruments, two current trends in some of the financial sectors, was highlighted whilst focus was given to the consumer detriment also surrounding these types of distribution channels and instruments.

On the topic of sales incentives, it was felt that in order to avoid mis-selling of financial products, several changes in sales culture are urgently required.

On product intervention, participants debated whether these powers would have the most value as a ‘threat’ in influencing firms to act in the best interests of their clients, and that product intervention should be seen in the round, as part of product design, product governance, and product distribution in order to address consumer protection issues before and up to point of sale, rather than playing catch-up after products hit the market.

Summarising the panel discussions, Andrea Enria, Chairman of EBA, said: "Today’s conference has stimulated a lively and fruitful discussion. The ESAs will continue to join forces to identify cross-cutting issues and to address them jointly to the benefit of consumers across the EU".

Steven Maijoor, Chairman of ESMA, in his closing remarks, indicated: "Whilst the financial crisis is mainly a stability crisis, and the regulatory response has been focussed on stability issues, we must not lose sight of our mandate, at European level, to promote the interests of consumers and to ensure a high level of consumer protection. But delivering on protecting consumers’ needs buy-in from industry (and consumers) too.

"It is not all about regulation, supervision and enforcement. Industry should internalise clients’ interests and business models need to focus better on client needs".