http://www.thehindu.com/life-and-style/society/article859454.ece
The right to information is one of the eight basic consumer rights,
and is the heart of consumer protection. It is particularly relevant
to complex financial products and services, as consumers need access
to information that enables them to comprehend what they are offered.
It is an interesting fact that every year, 150 million new consumers
take to financial services, most of them from countries where consumer
protection and financial literacy are still in their infancy.
Fair and accessible financial services to consumers are central to a
well-functioning economy. We are aware that ineffective regulation of
financial lending practices played a major role in creating and
worsening the recent financial crisis. Corrective action is required
to ensure this does not happen again.
The banking sector is still complex, rapidly changing, and carries
significant risks for consumers, and, there are no international
guidelines on how information should be delivered in a
consumer-friendly manner.
The Group of Twenty (G-20), of which India is a member, was
established in 1999 to bring together important, industrialised and
developing economies to discuss key issues in the global economy.
Since its inception, the G20 has held annual Finance Ministers and
Central Bank Governors' meetings and discussed measures to promote
financial stability, and achieve sustainable economic growth and
development.
During the summit in Pittsburgh in September 2009, the Leaders'
Statement declared, "Far more needs to be done to protect consumers,
depositors and investors against abusive market practices, promote
high quality standards and help to ensure the world does not face a
crisis of the scope we have seen. We are committed to take action at
the national and international level to raise standards together so
that our national authorities implement global standards consistently
in a way that ensures a level playing field".
At the summit in Toronto in June 2010, the key principle put forth was
to "encourage a comprehensive approach to consumer protection that
recognizes the roles of government, providers and consumers".
To take this commitment forward during the G20 Summit in November at
Seoul, South Korea, CAG, along with consumer groups from across the
world and the Consumers' International, has called for action on
financial consumer protection through the establishment of an Experts
Group on Consumer Financial Protection with representation from
financial consumer protection agencies, independent consumer
organisations and experts representing the interests of consumers.
The Experts Group so formed, is expected to recommend adoption by
various governments, of minimum standards relating to fair contract
terms and charges for financial products and services, information
design and disclosure on financial products, governance and functions
of national financial consumer protection bodies, promotion of
effective competition for financial consumer services and development
of a permanent organisation for international standard-setting and
co-ordination with regard to financial consumer protection.
Representations to the respective Heads of State and Finance Ministers
have been made in this regard, and it is hoped the dignitaries will
proceed with the establishment of the Experts Group.
(The writer works with CAG, which offers free advice on consumer
complaints to its members. For membership details/queries, contact
24914358/24460387 or helpdesk@cag.org.in)
