On 11 April, the European Commission proposed a ‘New Deal for Consumers‘ aimed at a better enforcement and modernisation of EU consumer protection rules. The EU proposal includes the introduction of a limited collective compensation mechanism (collective redress) across the EU that would cover financial services.
In a press release published on 17 April 218, BETTER FINANCE, the European Federation of Investors and Financial Services Users, welcomes this first EU initiative but highlights significant barriers that would hinder individual consumers to access the redress procedure.
The non-governmental federation, which has been advocating for an EU-wide collective redress mechanism for all financial services users, underlines that the right to redress and the right to access to justice is especially important in the area of financial services due to its complexity and impact on our daily lives.
AGE also believes that the growing digitalization and internationalization of financial services makes it necessary for the EU to develop a European-wide collective redress mechanism that effectively protects the rights of all individual financial services users including the most vulnerable ones. This is all the more relevant in the current context of pension reforms and the increasing use of cross-border private financial pension products to ensure sufficient retirement income.
The poor returns of pension funds was indeed highlighted in the report ‘Pension Savings: The Real Return’ published by BETTER FINANCE end of 2017.