1. Empowering Tomorrow’s Consumers Consumers International World Congress 2011 5 May Hong Kong World Bank Global Program on Consumer Protection & Financial Literacy Sue Rutledge Global Coordinator

2. o Consumer rights awareness o Financial institutions (or financial industry associations) could prepare a simple, easy-to-understand brochure about the consumer's legal rights regarding remittances o Consumer disclosure o Financial supervisory agency could ensure that comparable information is made available to consumers o For example, collecting from financial institutions their standard pricing for various types of remittances o Data should be publicly available in newspapers and internet Global Map of the Financially Included 2

3. o Equitable growth is undermined by weak financial consumer protection o Weak financial consumer protection regulation has led to abusive or deceptive practices by some financial providers o Particular issue for micro-finance (ex. India, Pakistan, Nicaragua, Kazakhstan) but seen throughout formal financial services o Loss of consumer trust in financial sector reduces household use of formal financial services o Weak financial literacy increases households’ vulnerability to abusive practices Part of Global Financial Inclusion Agenda 3

4. o Banking – Precondition of effective banking supervision o Deposit insurance – Core principle o Insurance – Core principle o Securities – Core principle o Private pensions - Main objective o International remittances – General principle o Statutory objective for financial supervisory agencies worldwide: o e.g. Canada, Colombia, Ireland, Malaysia, Singapore, South Africa, Sweden, UK, US Part of Global Financial Regulation & Supervision Agenda 4

5. o Launched Global Program on Consumer Protection and Financial Literacy o Drafted Good Practices on Financial Consumer Protection as assessment methodology o Published Working Paper -- Consumer Protection and Financial LIteracy: Lessons from Nine Country Studies o Member of Financial Stability Board Consultative Group on Financial Consumer Protection o Member of OECD Task Force on Financial Consumer Protection o Public feedback tool: feedback.consumerprotection.worldbank.org o Website: www.worldbank.org/consumerprotection World Bank Contribution 5

6. 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 6 Follow-up Household Survey Feedback Loop Input

7. Implementation Programs Action Plans -In pipeline Household Surveys -In pipeline Diagnostic Reviews -In pipeline Country Projects Under Preparation

8. 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) 8

9. Ins Banking Insurance Private Pensions Securities Non-Bank Credit, incl. MFI Good Practices for each sector focus on o Consumer disclosure o Business practices o Complaints & dispute resolution o Financial literacy Credit Reporting All Formal Financial Services Covered by Good Practices 9

10. 10 Consumer Disclosure Business Practices Consumer Redress Financial Literacy -Simple -Easy to understand -Accessible -Comparable -Simple -Easy to understand -Accessible -Comparable

11. 11 Helping Consumers Shop Around Makes a BIG Difference Credit Card Loans Average Interest Rates in Peru Source: Superintendence of Banking, Insurance and Private Pension Funds of Peru

12. 12 Business Practices Consumer Disclosure Business Practices Consumer Redress Financial Literacy - Free choice of financial products - Retail officers trained and qualified -Unfair, abusive practices prohibited - Free choice of financial products - Retail officers trained and qualified -Unfair, abusive practices prohibited

13. 13 Consumer Redress Consumer Disclosure Business Practices Consumer Redress Financial Literacy - Financial institutions complaints departments - Financial ombudsman - Financial institutions complaints departments - Financial ombudsman

14. 14 Financial Literacy Consumer Disclosure Business Practices Consumer Redress Financial Literacy Broad-based programs Government Financial industry NGOs Targeted initiatives Teachable moments Workplace Mass media Young adults Unbiased information Regulators Consumer associations Consumer Consultation Impact Measurement Broad-based programs Government Financial industry NGOs Targeted initiatives Teachable moments Workplace Mass media Young adults Unbiased information Regulators Consumer associations Consumer Consultation Impact Measurement

15. 15 Consultation Process for Draft Good Practices Consultative Draft of “Good Practices for Financial Consumer Protection” available at www.worldbank.org/consumerprotection www.worldbank.org/consumerprotection Public comments and suggestions feedback.consumerprotection.worldbank.org feedback.consumerprotection.worldbank.org Direct comments and feedback to Sue Rutledge at srutledge@worldbank.org srutledge@worldbank.org Comments due by June 30, 2011

16. Empowering Tomorrow’s Consumers Consumers International World Congress 2011 May 5 Hong Kong World Bank Global Program on Consumer Protection & Financial Literacy Sue Rutledge - Global Coordinator srutledge@worldbank.org