The FMA’s Role in Consumer Protection
The Financial Market Authority has an obligation towards collective consumer protection, and therefore protects the collective interests of consumers – for example customers of a particular insurance sector, or the savers and investors communities.
The Financial Market Authority primarily achieves its aim of protecting consumers by means of
- ongoing supervision
- pursuing providers that operate illegally
- ensuring as much as transparency in the financial markets
The Financial Market Authority, however, is not a consumer protection organisation in its classical sense. The protection of the interests of individual consumers continues to be a task conferred on the respective ombudsmen, boards of arbitration and courts. The Financial Market Authority is forbidden from intervening in a contract under civil law between a supervised entity and an individual customer. In the cases of claims for damages, the Financial Market Authority must always direct consumers towards action under civil law, to a mediation panel (e.g. for banking or consumer issues) or to the public courts of law. As a supervisory authority the Financial Market Authority is expected to retain an objective stance towards all supervised entities and their customers, and is never allowed to take sides.
Information, indications or reports by consumers, investors or creditors against market participants, however, are an important source of information in relation to supervisory activities. On the basis of such information the Financial Market Authority is able to take appropriate measures initiate initiatives and focuses in relation to consumer protection:
The focus of supervision for 2016 is compliance with information rights by the supervised entities. The empowered consumer should be able to select the financial product that best suits their expectations, requirements and risk appetite. In order to be able to reach a well-grounded decision, the customer must receive all information in a comprehensible, fair and non-confusing manner.
The Financial Market Authority itself also provides consumers with clear and comprehensible information on its website. The new Frequently Asked Questions contain clear answers to the most questions most frequently asked by consumers. In case you have further questions, please check out the information in the section on Complaints and Points of Contact.
A further focus exists in the checking of the processing of complaints by the supervised companies. Companies are expected to comply with specific guidelines in processing complaints. They are expected to publish information about the complaints process in an easily accessible manner, as well as to respond within a reasonable timeframe. The final decision must be explained by the company, and the customer must be information about the relevant mediation bodies that exist.