Financial services

The Price of Bad Advice

Today, consumers in the EU are not getting the advice they really need when looking for mortgages, insurance or seeking to better invest their savings.

The campaign The Price of Bad Advice – which began in 2018 – provides a snapshot of the major mis-selling scandals consumers have fallen victims to in the past 15-20 years across Europe.

BEUC is calling for a fundamental revision of the way financial advice is given to consumers, including a ban of sales incentives which fuel the mis-selling of complex financial products to consumers.

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Across the EU, consumers are left with serious concerns about the future of their personal deposits, savings, loans and pensions – a problem aggravated by the economic crisis. This same crisis has shown that financial supervision authorities were incapable of detecting the risks of evermore complex products accurately and adopting the necessary measures to avoid this crisis. Therefore, it is essential to restore consumer confidence, and protect all European consumers at national and cross-border level.

Since the crisis, the EU has focused on stabilising the financial sector. We believe that regulation to better protect consumers is long overdue. This is particularly the case in the area of financial advice where consumers are frequently misled and sold products they do not need, or that are unnecessarily risky.

EU consumers are too often presented with increasingly complex and poor value-for-money products that do not meet their requirements. Today retail finance ranks rock bottom in terms of trust among the services that consumers use on markets.

Investors should be able to get understandable, correct product information when they are looking to invest their money into a project.

Digitalisation has opened the door to new financial services, such as fintechs, which are challenging existing banking and payment models, investments and insurances. These changes offer consumers exciting new opportunities but it is important these new services are properly regulated so consumers are protected. Consumers expect banking and payment services to be secure, affordable, and accessible with a high level of data protection.

Another important development driven by digitalisation - financial firms increasingly use big data, for various purposes like marketing, price-setting and personalisation of financial offers. While this evolution comes with some potential benefits for consumers, such as better targeted offers, it also triggers huge questions on privacy, fairness, and exclusion.  

Good legislation which protects consumers is insufficient to ensure strong consumer protection unless it is properly enforced everywhere in the EU. However, national supervision in financial services varies a lot from one Member State to another, leading too often to poor consumer protection. We want to see higher levels of consumer protection everywhere in the EU.

• Strengthen regulation and supervision for retail financial services
• Make essential payment services efficient, fair, affordable and secure
• Push the EU to legislate on FinTechs so that consumers are protected to a high standard when they use these services
• Ensure information on financial services is easy to understand and comparable – also across borders – and that advice on financial services is affordable and reliable
• Advocate for financial services suitable for those who buy them
• Push retail finance to offer a simple, standardised product as the default option in every product category
• Prevent consumer discrimination and exclusion due to the growing use of big data by financial firms.
• Make sure that growing digitalisation does not lead to financial exclusion of certain categories of consumers.