Global forum asks G20 to protect consumers


New Delhi : A global consumer interest protection forum has asked finance ministers of the G20 to come up with tighter norms to protect buyers of financial services and alleged that current proposals lack teeth.

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Consumers International, a global federation of consumer organisations, said weak consumer protection in the form of irresponsible mortgage lending was both a catalyst for the financial crisis of 2008, and is a long-standing concern of “ordinary people” who use financial services every day.

In the last G20 meet, the Organisation for Economic Cooperation and Development (OECD) and the Financial Stability Board (FSB) had been asked to suggest measures for protecting interest of consumers in the financial services sector.

“We are concerned that in important areas the recommendations fall short of what is required. In particular, we are concerned that the OECD principles do not include any explicit reference to deposit guarantees in the event of bank failures,” Consumers International said in a letter to the G20.

Pradeep Mehta, secretary general, CUTS International, and Shirish Deshpande, chairman, Mumbai Grahak Panchayat, are signatories to this letter from India.

We also ask you to support establishment of an effective new international organisation to support and champion improved consumer protection in financial services. Given the importance of financial services, it is unacceptable that such an organisation does not already exist,” the organisations demanded in the letter.

“We ask that more work is done on these areas, and that the work is done quickly and through a completely open process that allows consumer organisations to fully participate from beginning to end.”