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Consumer protection and financial literacy : lessons from nine country studies

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  • Rutledge, Susan L.

Abstract

The 2008 global financial crisis has emphasized the need for adequate consumer protection and financial literacy for long-term stability of the financial sector. This Working Paper aims to summarize key lessons from reviews of consumer protection and financial literacy in the nine middle-income countries of Europe and Central Asia: Azerbaijan, Bulgaria, Croatia, the Czech Republic, Latvia, Lithuania, Romania, the Russian Federation and Slovakia. All the country assessments used a systematic common approach, based on a set of Good Practices for Consumer Protection and Financial Literacy developed by the World Bank's Europe and Central Asia Region. A financial consumer protection regime should meet three objectives. First, consumers should receive accurate, simple, comparable information of a financial service or product, before and after buying it. Second, consumers should have access to expedient, inexpensive and efficient mechanisms for dispute resolution with financial institutions. Third, consumers should be able to receive financial education when and how they want it. A common challenge among the nine countries is the need of an adequate institutional structure for financial consumer protection. Regardless of the specific institutional structures, financial consumers should have one single agency where to submit complaints and inquiries. Financial institutions should be required to apply fair, non-coercive and reasonable practices when selling and advertising financial products and services to consumers. Personal data should also be carefully protected.

Suggested Citation

  • Rutledge, Susan L., 2010. "Consumer protection and financial literacy : lessons from nine country studies," Policy Research Working Paper Series 5326, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5326
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    Cited by:

    1. Marimuthu SELVAKUMAR & Veluchamy SATHYALAKSHMI, 2015. "Financial consumer protection and customer satisfaction. A relationship study by using factor analysis and discriminant analysis," EuroEconomica, Danubius University of Galati, issue 2(34), pages 71-94, November.
    2. Reurink, Arjan, 2016. "Financial fraud: A literature review," MPIfG Discussion Paper 16/5, Max Planck Institute for the Study of Societies.
    3. Raccanello, Kristiano & Romero-García, David Arturo, 2012. "Prácticas predatorias y crédito al consumidor," eseconomía, Escuela Superior de Economía, Instituto Politécnico Nacional, vol. 0(36), pages 7-43, cuarto tr.
    4. Thorsten Beck & Samuel Munzele Maimbo & Issa Faye & Thouraya Triki, 2011. "Financing Africa : Through the Crisis and Beyond," World Bank Publications, The World Bank, number 2355, January.
    5. Ardic, Oya Pinar & Ibrahim, Joyce A. & Mylenko, Nataliya, 2011. "Consumer protection laws and regulations in deposit and loan services : a cross-country analysis with a new data set," Policy Research Working Paper Series 5536, The World Bank.

    More about this item

    Keywords

    Bankruptcy and Resolution of Financial Distress; Debt Markets; Access to Finance; Financial Literacy; Emerging Markets;

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