Financial Crime World

Strengthening Consumer Protection in Financial Services

Enhancing Supervision and Regulation

In line with our commitment to promoting economic stability and protecting the interests of consumers, we are pleased to present our report on the progress made in strengthening consumer protection in financial services.

Establishment of Informal Communication Mechanisms

  • We have established regular informal communication mechanisms between supervisors, industry associations, and consumer organizations to discuss emerging issues, proposed legislation, and results of business conduct supervision.
  • This collaborative approach will enable us to better inform stakeholders about new developments and seek their cooperation in improving consumer protection.

Responsibility: CBA, SCS, MOF, with relevant industry associations and consumer organizations Deadline: Quarterly meetings starting from Q3 2010

Mystery Shopping and Reporting Requirements

  • We have introduced mystery shopping as an official tool for on-the-spot control of sales processes, particularly in relation to proper client information and disclosure.
  • Financial institutions will be legally required to report any unfair client behavior or mis-selling by other financial institutions.

Responsibility: CBA, SCS, MOF, in joint cooperation Deadline: Q2 2011

Naming the Appropriate Supervisor

  • We have mandated that all financial institutions clearly state their supervisory authority in their marketing materials and products.
  • This will ensure transparency and accountability for consumers.

Responsibility: CBA, SCS, MOF, with industry associations and consumer organizations Deadline: Q4 2010

Disclosure of Information

  • We recognize the importance of full disclosure of information in formats that are understandable to an average customer.
  • To achieve this, we will introduce Key Facts Statements for all financial products, listing important information about the product in a standardized form.

Responsibility: Sector supervisors, with involvement of industry associations and consumer organizations Deadline: Q4 2010

Key Facts Statements

  • We have developed Key Facts Statements for all financial products, including credit unions, microfinance organizations, and leasing companies.
  • These statements will provide customers with essential information about the product in a clear and concise manner.

Responsibility: Sector supervisors, with involvement of industry associations and consumer organizations Deadline: Q4 2010

Implementation of Key Facts Statements

  • We will require financial institutions to provide supervisor-approved Key Facts Statements to clients prior to any transaction.
  • Supervisors will monitor the distribution of these statements during inspections and analysis of received complaints, and impose sanctions on companies that fail to provide truthful Key Facts Statements.

Responsibility: CBA, SCS, MOF, in joint cooperation Deadline: Law changes by Q4 2010; implementation into the sales process by Q1 2011

Conclusion

The strengthening of consumer protection in financial services is a key priority for our government. Through these initiatives, we aim to promote a more transparent and accountable industry, protect the interests of consumers, and enhance economic stability. We are committed to continuous improvement and look forward to working with stakeholders to achieve this goal.