Banks and Consumers

BANKENVERBAND
There can be no blanket protection for
consumers.
Michael Sell, Chief Executive Director for Cross-Sectoral Issues/Internal
Administration at the Federal Financial Supervisory Authority (BaFin), in his
second argument on the reorganisation of consumer protection in financial
services, F.A.Z. supplement of 10 November 2010.
Government regulation in the area
of consumer protection cannot be an end
in itself. It must also serve to promote the
development of the financial markets and
to protect markets and market participants
against risk.
Consumer policy can only be successful
if consumers, business and government
make use of the existing tools – consumer
education, consumer information and
consumer protection – to increase consumer
prosperity without restricting the freedom of
other market participants. It is a question of
preventing government over-regulation and
preserving the consumer’s independence.
The repeated attempt to shift the
funding of debtor counselling to the
banking industry also goes in the wrong
direction. There is no denying that debtors
occasionally overestimate their ability
to make payments or, due to personal
misfortune such as illness, unemployment
and divorce, experience financial difficulties
and distress. But it would be wrong both
objectively and economically to transfer
responsibility for such predicaments to
banks. A bank account merely reflects the
customer’s financial situation; the causes of
indebtedness can be proven empirically to
lie primarily in the customer’s own personal
circumstances and not in the relationship
with the account-holding bank.
The centrepiece of the private commercial
banks’ comprehensive consumer policy scheme
is therefore the provision of information to
customers – customers should receive from
their bank all the information they need to
make financial decisions.
Consumers do not want to be nannied,
but to conduct their business on their own
responsibility. They do not need excessive
consumer protection legislation that relieves
them of the economic consequences of their
independent decisions.
There is cause for concern regarding the
Commission’s opinion that consumers are
“disoriented” and often do not act according to their
“true” interests and therefore must be shown – of
course by the EU – the way to happiness; the result
of that would be bureaucratic paternalism. The EU
should return to the concept of the “responsible
consumer”: neutral product information, yes;
evaluative statements serving to manipulate certain
consumer behaviour, no.
Roman Herzog, Frits Bolkestein and Lüder Gerken, “Die EU schadet der
Europa-Idee”, (“The EU harming the idea of Europe”), F.A.Z., 15 January 2010.
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