Customer protection principles
Article L.612-1 of the French Monetary and Financial Code mandates the ACPR to ensure the “the stability of the financial system and protection of the clients, the insured, and the members and beneficiaries of the entities subject to its supervision” and the compliance of such persons with “the rules intended to protect their clients” as well as “the suitability of the means and procedures they implement for said purpose”.
What does consumer protection mean?
In the banking and insurance sectors, customers often have much less knowledge than the professional: this is called “asymmetry of information”. The customer is not always able to properly assess the benefits, drawbacks and risks of a product. This can lead to commercial malpractices to the customer’s detriment.
This is the purpose of consumer protection and the duty of each professional to reduce this asymmetry of information so that any customer may be proposed products adapted to its needs and expectations, and may take an informed decision regarding a purchase or subscription. This is crucial to guarantee the public confidence in the financing sector.
The role of the ACPR is to promote fair behaviours and business practices, taking into accounts customers’ interests, limiting their risks and preventing the risks of conflict of interests to the customer’s detriment.
Some principles can be identified in terms of good business practices and consumer protection:
- Number one : Ensuring the customer is properly informed and the explanations given are loyal, including about fees and risks. This includes paying attention to the commercial staff training, both on products and customer protection regulation.
- Number two : Managing the compliance risk of the professional but not only: more generally, he/she shall ensure the customer’s interests are taken into account in any circumstances and that he/she has not transferred excessive risks to it. This includes adapted business governance and management of conflicts of interest.
- Number three : If the main mission of the ACPR is to ensure the compliance with regulation, the overall objective shall be kept in mind: to efficiently apply customer protection regulations as part of business activities, its objectives must always be reminded and shared in the institution.
The question of the consumer protection and good business practices must be taken into account throughout the business process: from the creation of products and business tools, including digital interfaces, to the choice of partners, the marketing practices to the performance of the contract and complaints management. As regards the latter point, listening the customer, dealing with its request with due diligence, analysing complaints transversally are important elements in terms of business practices.
See the ACPR recommendation on complaints management
Click on the following links to find the ACPR regulations and work on the matter:
Updated on: 06/07/2018 15:12