Empowering Tomorrow’s Consumers

Consumer Protection & Financial Literacy

Sue RutledgeGlobal Coordinator, World Bank

PARTICIPANTS: PLEASE SIT WITH CONSUMER ORGANIZATIONS FROM YOUR GEOGRAPHIC REGION

Empowering Tomorrow’s Consumers Consumers International

World Congress 20115 May Hong Kong

Consumer Protection & Financial Literacy

Sue RutledgeGlobal Coordinator, World Bank

• Program for Europe & Central Asia Region started 2005

• Global Program launched November 2010

• World Bank loans of $28 million

• Ongoing projects of $144 million

• Donor funding from Dutch BNPP, Japanese PHRD, Russian Financial Literacy/Financial Education Fund, Swiss SECO, UK DFID, USAID

Global Program on Consumer Protection & Financial Literacy

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Strategy for Country Programs

Baseline Household Survey

of Financial Literacy & Consumer Behavior

Action Plan to Implement

Recommendations

Diagnostic Review of Legal

& Regulatory Framework

Implementation Program

Follow-up Household

Survey

Feedback Loop

Input

Implementation Programs

Action Plans

-In pipeline

Household Surveys

-In pipeline

Diagnostic Reviews

-In pipeline

Projects Underway

• 33 countries have requested assistance

• Detailed diagnostic reviews completed in 12 countries

• Household surveys in 4 countries

• Action plans in 3 countries

• Implementation underway in 3 countries

• Planned activities in 14 countries

• Armenia, Azerbaijan, Bosnia & Herzegovina, India, Kazakhstan, Malawi, Nicaragua, Pakistan, Philippines, Russia, South Africa, Tajikistan, West Bank/Gaza, Zambia

Status of Country Programs

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Initial Results of Country Programs

•First Financial Education Strategy (2007)

•Consumer Protection Department at CNB (2008)

•Financial Arbiter to cover all financial sector (2009)

Czech Republic

•New regulation of financial intermediaries (2010)

•Banking Association’s ombudsman (2007) and new financial ombudsman (2010)

Slovakia

•Central Bank’s Consumer Protection Unit (2009)

•Steering group on consumer protection (2010)

Azerbaijan

•MoF’s evaluation of institutional arrangement (2010)

•Industry association implemented recommendations (2010)

Lithuania

•Inter-institutional working group on consumer protection & competition, including Reserve Bank (2011)

Malawi

Main Stakeholders

GOVERNMENT• Ministries (e.g. Finance,

Economy, Education)• Public agencies (e.g.

consumer protection, data protection, competition)

• Councils (e.g. consumer protection, education)

FINANCIAL SUPERVISORS

• Financial supervisory agencies

• Central Bank• Financial consumer

protection agency• Compensation

schemes

INTERNATIONAL COMMUNITY

• Donors• Regional organizations• Standard setters• International

associations

REDRESS MECHANISMS

• Ombudsman• Arbitration• Mediation, conciliation• Courts

CIVIL SOCIETY• Consumer

associations• Debt counseling • Foundations• Academia• Media

FINANCIAL INDUSTRY• Industry associations• Training centers• Financial institutions

(incl. distributors)• Financial infrastructure

(e.g. credit bureaus)

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Ins

Banking

Insurance

Private Pensions

Securities

Non-Bank Credit,

incl. MFI

Good Practices for each sector focus ono Consumer disclosureo Business practiceso Complaints & dispute

resolutiono Financial literacy

Credit Reporting

All Formal Financial Services covered by Good Practices

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o Collect and publish case studies and other data on consumer complaints about financial services

o Publish stories showing how consumers can exercise their legal rights

o Publish comparable financial offers

o Provide glossary of common financial terms and concepts

o Maintain a hotline of advice for financial consumers

o Go to court on behalf of financial consumers

o Advocate for improved consumer protection in financial legislation

Some Ideas on how Consumer Organizations can Help

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• Develop organization charts with defined roles

• Draft five-year strategies

• Prepare annual budgets

• Have annual financial statements audited by independent auditor

• Establish track record of impact in helping financial consumers

• Provide advice to government consumer protection agencies

How can Consumer Organizations become Eligible for World Bank Funding?

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Empowering Tomorrow’s Consumers

Consumers International World Congress 2011

5 May Hong Kong

World BankGlobal Program on Consumer Protection & Financial Literacy

Sue Rutledge - Global Coordinatorsrutledge@worldbank.org