Financial Crime World

Consumer Protection in Hungary: Laws, Regulations, and Future Developments

Current Laws and Regulations

The Consumer Protection Act (2014) is the primary legislation governing consumer protection in Hungary. This act defines the rights and responsibilities of consumers, as well as the obligations of businesses to protect consumers’ interests.

  • Key Provisions: The act covers various aspects of consumer protection, including:
    • The rights of consumers to receive accurate information about products and services
    • The obligations of businesses to provide fair and transparent pricing
    • The right of consumers to redress for any losses or damages incurred due to business practices

Enforcement and Supervision

The Hungarian National Bank (MNB) is responsible for enforcing consumer protection regulations and supervising financial institutions. In cases where a business has infringed on consumer protection laws, the MNB can impose sanctions.

  • Sanctions: The MNB may issue warnings, order the cessation of infringing activities, prohibit further infringements, ban or impose conditions on businesses, or impose consumer protection fines.
  • Investigations: Proceedings for consumer protection can be opened up to five years after an infringement has occurred, with a six-month administrative time limit for MNB investigations.

The financial sector is evolving to address climate change, sustainable finance, and green economy criteria. The European Commission has announced a renewed sustainable finance strategy, which aims to support the financing of the transition to a sustainable economy.

  • Sustainable Finance Action Plan: The European Banking Authority (EBA) has launched its Sustainable Finance Action Plan, which includes:
    • Disseminating ESG risks according to Pillar 3 of Basel
    • Reporting on the classification and prudential treatment of assets with a sustainability perspective
    • Requiring EU-based financial institutions to report on their exposure to physical climate change and transition risks

National banks, including the MNB, are moving towards greener and more sustainable financial solutions. This shift aims to ensure that domestic financial products and services support environmental sustainability.

Key Takeaways

  • The Consumer Protection Act (2014) defines the rights and responsibilities of consumers in Hungary.
  • The Hungarian National Bank (MNB) enforces consumer protection regulations and supervises financial institutions.
  • Emerging trends in sustainable finance are influencing regulatory policies, with a focus on climate change and green economy criteria.