/ Money

Together, how can we fix financial services worldwide?

It’s not just Brits getting a raw deal from the banks, it’s an international problem. To mark World Consumer Rights Day, Consumer International’s Helen McCallum explains the challenges facing consumers globally.

In 2007 the world was thrown into financial turmoil by the US sub-prime mortgage crash.

At the heart of that crisis was a basic failure to protect consumers from bad products and predatory lending. Years later, as many governments concentrate on tackling high levels of debt and unemployment, consumers around the world are still being let down by financial service providers.

Consumers are being failed around the world

The list of complaints is endless. Bank of America, for example, recently planned to impose a monthly fee of $5 to all current account holders just for the ‘privilege’ of using their debit cards – this at the height of last year’s Occupy Wall Street protests.

In Spain, variable interest rates on mortgages have a minimum cap, but not a maximum. This prevents Spanish consumers from benefiting from low base rates, but not from suffering when interest rates sky-rocket.

Even in Germany, a country that has weathered the storm better than others, there are still only 1,000 debt advisors despite 10% of Germany’s households experiencing over-indebtedness.

The saga continues further afield. In emerging economies like South Africa, Chile and Brazil, easy access to credit is pushing up household debt to worrying levels.

And – in a truly international example – millions of families around the world who rely on money sent home from relatives working aboard are losing out on billions of dollars through the extortionate fees charged by money transfer companies.

The consumer movement fights back

The problems described above are just the tip of the iceberg, and many will sound depressingly familiar to UK consumers. In fact, there’s an astonishing amount of cross-over between the experiences in different countries, and consumer organisations have a lot to learn from each-other.

For example, Consumers’ Union, the US consumer organisation, was instrumental in getting legislation passed to create a new financial regulator charged exclusively with protecting consumers. Consumers Korea has also been lobbying their government for a similar regulatory model.

And now Which? is calling for a consumer protection regulator with teeth as part of its ‘Watchdog not Lapdog’ campaign.

These cases really demonstrate how solutions, as well as the problems, are often common across borders.

Our money, our rights

Consumer groups have their work cut out for them in other ways too. In the UK, victims of abusive practices can seek redress via the Financial Services Ombudsman or through the courts. But many other countries lack consumer protection legislation (or simply the resources to enforce existing rules), so lobbying governments for basic laws and regulations is often an urgent concern.

Access to the most basic of financial services is also a top priority in many developing countries, as it allows those on low incomes to manage their budgets and plan for the future.

Similarly, empowering consumers with basic financial literacy skills is very important. Consumer groups in Kenya, Tanzania and Uganda, for example, are doing great work to educate consumers as can be seen in our new short film.

It’s clear from all of these international examples that we’re in this together. So, to mark World Consumer Rights Day, we want everyone around the world to get a better deal from financial services. It’s our money, so we need rights to protect it. The question is – what problems are you facing with financial services?

Which? Conversation provides guest spots to external contributors. This is from Helen McCallum, the Director General of Consumers International – all opinions expressed here are their own, and not that of Which?


Consumers of financial services in Nigeria face a twin-problem of Electronics/Mobile Banking and Debit Card issues. This problem is inflicted on unsuspecting consumers through the Automated Teller Machine Debit Card or scam done through the use of computers or mobile phones. For instance, the consumer gets a debit alert that his/her money has been withdrawn from a far distance town, even when the debit card is intact in his/her custody.

The Council has received a complaint whereby a consumer’s money was fraudulently withdrawn from her account even when she reported earlier that her card was stocked in that bank’s ATM machine. Many of the banks deny liability in such fraudulent transactions, claiming the consumers’ cards or/and PINs were compromised.


Improper charges are the Brazilian consumers’ biggest problem face in financial services. This complaint is in the first place in the ranking of National System of Consumers’ Protection and in the ranking of Central Bank of Brazil. Just six banks are responsible for 85% of the market and the financial sector is one of the most demanded sectors. In ranking of Idec, the financial sector was the most demanded. This complaint, in part, comes from the lack of information provided by banks, although it’s an obligation of the bank according to the Consumer’s Defense Brazilian Code.


The biggest problem faced by Malaysian consumers in the Banking sector is the lack of transparency to the consumers in the banking and insurance services. Many of the complaints by consumers relating to the financial sector often have to do with lack of understanding or misunderstanding of interest, charges and penalties. The consumers are not informed or that information is hidden somewhere in the “terms and conditions” and the consumers are not aware of these charges. It is the right of the consumer to be made aware clearly on all related charges to be incurred so that the consumers can make decisions based on informed choices. One example is that the bank reserve the right and discretion to review interest rates at any time and for no valid reason.

There have been several cases in which the interest rates have been revised upwards and the consequence is that the consumer has to bear a heavier financial burden. Thus banks and financial institutions, with prodding and enforcement by the regulator should ensure that the consumer is given clear and reliable information, and if for any reason, the charges are to be altered, they should first seek the consent of the consumer.


The biggest problem of Chilean consumers in the financial services market is the serious difficulty to understand basic financial concepts. Most of people, specifically those who need credits from financial institutions to manage low salaries, do not have financial education that brings tools to know, among others concepts, the following: (a) the importance of looking for the best credit options available (in terms of comparison between interest rates, operational cost different to interests and use the advantages of quoting); (b) impact of “minimum payments” according to rules established in contract, bearing in mind that the debt increases by effects of interests; (c) over-indebtedness.

Mira says:
15 March 2012

The privatised creation of money by banks is at the root of debt, poverty, inequality, unaffordable housing. It makes our boom-and-bust economy completely unstable, and is also fuelling the environmental and energy crisis. This video explains everything you need to know in just 20 minutes

This 22 minute video explains the 3 simple changes we need to make to fix our broken banking system. http://bit.ly/oyrH41


This is where Capitalism & Greed finally goes as it concerns greed/ salaries wages . The problem is Deregulation from the Government & no responsibility or ethics from those in charge.Head Offices have been disbanded in fact many are these Call centres directed by sole accountants for their own gain when Governments, Customer & public services do it we are on a hiding to nothing . Yesterday it was the Police not recognising fraud.Often it is the Banks, Media Regulatory organisations & Charities.
DECONSTRUCT & bring back the Managers with Discretion & Compensation.This is false economy.

ropa erotica says:
8 October 2012

I am not sure the place you are getting your information, but good topic. I must spend some time studying more or figuring out more. Thanks for magnificent info I used to be in search of this info for my mission.