18 March 2013

EBA publishes Consumer Trends Report

This report provides an overview of the consumer protection analysis. The analysis identifies key issues in the areas of consumer protection and financial innovation, and highlights the new trends and the key areas for concern in 2013.

The report, which follows up on the overview of the EBA’s work on Consumer Protection and Financial innovation published in February 2012, consists of two parts. The first one is a description of the work done by the EBA, by other EU institutions and by the Member States to address the key issues in consumer protection in the EU banking sector which had been highlighted in the first survey of the national competent authorities. The second part focuses on a revised set of issues, trends and products for 2013 following a new survey conducted in the second quarter of 2012.

While not claiming to present a comprehensive picture of all relevant risks or potentially harmful products from a consumer prospective, this report identifies six main consumer issues:

• Indebtedness and responsible credit;
• Transparency and levels of charges;
• Scope of mis-selling of financial products resulting from a combination of pressures on institutions and the continuing challenges for consumers in understanding the suitability of products for them;
• Specific issues concerning certain products – notably foreign currency loans, payment protection insurance and complex products;
• Security of new technologies used for banking services;
• Emerging new forms of liquidity raising.

These findings are not unexpected or fundamentally new as many of concerns identified also reflect macro-economic conditions which have remained challenging over the recent period and the consequent consumers’ behaviours as well as those of some financial institutions in the EU banking sector.

In an attempt to address some of these issues, in 2012, some Member States introduced additional requirements and new standards, and the EBA is currently working on identifying good practices on responsible lending and on the treatment of borrowers facing payment difficulties. Furthermore, the EBA is also developing a revised methodology and set of criteria to identify consumer trends and issues better for future updates of this report.

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