Does EU law help protect consumers in international and domestic markets? Which consumer protection tools and models are most effective in each country? These questions were answered by guests of the Financial Ombudsman during a debate devoted to consumer protection in the European financial market. The interlocutors were unanimous – the appointment of a European financial ombudsman to represent consumers’ interests at European Union level should be considered.
prof. Mariola Lemonnier, prof. Mariusz Golecki, Aleksandra Mączyńska
“Consumer protection in a global context, particularly in relation to consumer relations within the European Union, is extremely important, as every consumer, regardless of where they live, should have the same opportunities to assert their rights. A Financial Ombudsman Office at European Union level would increase customer safety,” said Financial Ombudsman, Prof. Mariusz Golecki, emphasising the need for discussions at the supranational level, involving international experts.
The panel organised by the Financial Ombudsman during the 13th European Economic Congress was participated by international guests: Prof. Mateja Durovic from the King’s College London, Member of the Board of the International Association of Consumer Law, Prof. Marta Infantino from the Faculty of Law at the University of Trieste, Aleksandra Mączyńska, Executive Director of Better Finance, Prof. Cristina Poncibo from the Department of Law at the University of Turin, Prof. Mariola Lemonnier from the Department of Financial Law, Faculty of Law and Administration at the University of Warmia and Mazury in Olsztyn and Prof. Piotr Tereszkiewicz from the Department of Civil Law, Faculty of Law and Administration at the Jagiellonian University.
The participants discussed the most pressing issues related to customer protection in the financial market, including the still current topic of so-called Swiss franc loans.
“The case of loans denominated and indexed to the franc shows considerable inequalities in the treatment of consumers in the financial market across countries. The problem of Swiss franc loans concerns not only Poland, but the entire region. We need greater efficiency and actions that will influence effective solutions. Perhaps the solution is wider access to dispute resolution, not only at the court level,” noted Golecki, referring to the situation of consumers in other countries.
prof. Mariola Lemonnier, prof. Mariusz Golecki, Aleksandra Mączyńska
The debate also raised a number of issues relating to the need for cross-border protection of consumer rights. The panel participants presented national perspectives and pointed out how the legislation of individual countries looks in the light of the new EU consumer policy. One of the topics discussed was ensuring consumer safety in cyberspace.
“The European Union aims to put consumer protection online at the same level as for traditional financial services. As shown by the experience of the COVID-19 pandemic, when a whole range of activities of consumers, but also of the financial sector – banks, insurers – were transferred to cyberspace. Communication between consumers and financial market operators was exclusively digital. This experience makes it clear that effective law enforcement and the possibilities of redress for consumers should be a key element. It is also worth noting the necessity of financial education, which should be treated as a pan-European priority,” stressed Prof. Mariusz Golecki, Financial Ombudsman, in the discussion.
The development of technology is treated as quite a challenge because the asymmetry between the individual consumer and cybercriminals is huge.
“While we are still struggling with the implementation of PSD II, from today’s perspective we know that it is not enough, technology is ahead of legislation. The regulation of payment services must not just be a so-called regulatory sandbox. Because payment services are based on the functioning of many business models, from simple bank transfers to complex operations related to optimisation of personal finance management, namely fintech solutions,” added Golecki.
The panel participants agreed that it would be advisable to adopt the “twin peaks” model in the European Union. This would involve setting up two bodies at EU level: one specialised in prudential supervision of market institutions and one responsible for conduct of business supervision and consumer protection.
An alternative to such a solution could be enhanced cooperation between the financial ombudsmen from individual Member States. According to Prof. Mariusz Golecki, the problem is, however, different models of consumer protection adopted in EU countries. In the opinion of Prof. Golecki, it could also be problematic to achieve sufficiently intensive cooperation between ombudsmen to meet the challenges arising, for example, from the development of new technologies and cross-border problems.
“We are talking about adopting general systemic solutions, either increasing the coordination of these ombudsmen’s activities, introducing a more uniform, more effective model in individual Member States, or introducing a single body at the European Union level, which would be a financial ombudsman,” explained Prof. Golecki.
According to him, the appointment of a financial ombudsman in the EU would contribute to making “the voice of consumers in the financial market heard better”, also in Brussels or Luxembourg.
“It would certainly be useful in the near term, it would improve the quality of financial services, but also the protection and security in this market. The appointment of a European financial ombudsman
would also improve the exchange of information and contribute to increased financial education activities. Technology knows no boundaries and we have to learn from it,” said Prof. Golecki.
The Executive Director of BETTER FINANCE, Aleksandra Mączyńska, is of a similar opinion. “We see no compelling reason why a body dealing with and specialising in consumer protection in the financial market should not be set up at EU level,” she stressed.
Aleksandra Mączyńska – BETTER FINANCE
Mączyńska noted that currently we have three European supervisory authorities dealing with financial/banking products, stock exchanges and securities, and insurance and occupational pension schemes (EBA, ESMA and EIOPA).
“These authorities also have consumer protection tasks within their remit, but because of their many other tasks, they do not really have the time or the resources to devote to consumer issues as much as we would like. I am convinced that ultimately the +twin peaks+ model would provide more effective consumer protection,” concluded the representative of BETTER FINANCE.
Recording of the debate:
