28 February 2008

IMCO meeting 27-28 February

Protecting the Consumer: Improving consumer education and awareness on credit and finance

Green Paper on Retail Financial Services in the Single Market

(Both report were discussed together)

Rapporteur consumer education Iliana Iotova (PSE/BUL) presented her report concentrating on the already existing Commission initiatives as there are the ‘Dolceta’ website and other publications. These however, have to be revised on completeness and accessibility.

Rapporteur on the Green Paper on Retail Financial Services Olle Schmidt (ALDE/SWE) pointed in his report to the cost aspects for changing the provider of services. Customers must be free to do so at any time, with minimum legal barriers and costs, he said. He also focused on Alternative Dispute Resolution (ADRs) and called the Commission to promote ‘best-practices’ in this regard.

The central point of his report, he said, is the need and consumers access to “collective redress”. This should be developed in an EU style, and not simply by copying the US model. He agreed with the initiative taken by Commissioner Kuneva in this field.

Opening the debate Othmar Karas (EPP/AUT) underlined the role of information with the Schmidt report. The focus should be quality of information, not quantity. It has to be proved which information the consumer really needs.

On collective redress he stated that the conventional judicial measures should not be neglected. Also, the diversity of financial product has to be considered.

Ieke van den Burg (PES/NL) was missing the attention to collective products, such as pensions in the Iotova report.

On the Schmidt report she underlined the need for comparability of information from products and sectors. It is often unclear which provision, be it from securities, insurance, etc, applies, she said. Therefore, these provisions should be streamlined. MiFID could give a helpful base for this project, she said.

She also noted that the concept of collective redress is not part of all member state legislation.

Wolf Klinz (ALDE/DE) called for a step-by-step approach with regard to Alternative Dispute Resolution. One should wait for the results from the Commission study due in summer, and for the experiences in those northern countries who are currently applying such legislation.

In a short statement the Commission called the Schmidt report a well-balanced approach. The Commission is already undertaking many of the measures the report proposes.

Timetable (Schmidt report):

6 March: Deadline for amendments

Iotova working document

Schmidt draft report,

Green Paper on Retail Financial Services in the Single Market

© Graham Bishop