European Banking Authority: fees and charges, indebtedness and financial literacy among the most relevant topics for consumer protection

The report underlines the upward trend in consumer indebtedness in the European Union (EU), particularly sharp in mortgages, while deposits decreased in volume. It also stresses the increase in the number of people holding a payment account within the EU.

Building on the information provided by the supervisory authorities, consumer associations, industry associations and alternative dispute resolution bodies, the EBA identifies six topical issues for the protection of consumers of retail banking products and services:

• Fees and charges, in particular in terms of lack of transparency in the information provided to customers and mischarged fees;

• Indebtedness, responsible lending and creditworthiness assessment, highlighting, among others, concerns over the high indebtedness levels of EU consumers and possible implications of future developments in terms of interest rates, creditworthiness assessment practices and service providers outside the regulatory perimeter;

• Financial literacy and education, with concerns over the low level of financial education among the general population and among specific vulnerable groups, as well as the need for digital financial education;

• Transparency and disclosure of pre-contractual information and changes to contractual terms and conditions, which, among others, mirrors a concern about the inadequacy of pre-contractual information provided to consumers and the unilateral amendment of contractual terms and conditions;

• Data breach and cyber security, particularly analysing the risks associated with digitalisation in the provision of retail banking products and services;

• Cross-border selling of products and services, underlining the challenges of purchasing retail banking products and services from financial institutions operating in other EU Member States.

The Report also identifies the measures being taken by the EBA and by the competent authorities for each of these issues. The EBA intends to use the findings in the Report when shaping its work programme in the consumer protection area for 2020.

About the Consumer Trends Report

The Consumer Trends Report 2018/2019 builds on information provided by the national supervisory authorities, consumer associations, members of the Financial Dispute Resolution Network (FIN-NET) and EU industry associations. It also takes into account statistical data and reports from third parties, such as Eurostat, the European Central Bank and the World Bank.

Banco de Portugal was one of the supervisory authorities involved in the working group drafting the report.

This is the first biennial publication of the Consumer Trends Report. The EBA plans to maintain this publication schedule so as to allow for an in-depth analysis of the main issues.