A comprehensive policy framework for financial consumer protection can help protect financial consumers from potential detriment. As the international standard for  financial consumer protection, the G20/OECD High-Level Principles on Financial Consumer Protection set out the components that countries should consider when developing a financial consumer protection regulatory framework. They also offer a roadmap for countries aiming to improve their existing policies and regulations. The Principles are cross-sectoral in nature and can be applied to the credit, banking, payments, insurance, pensions and investment sectors.

Consumers of financial products and services face a complex landscape with a range of evolving issues, opportunities and risks. It is therefore critical that policy makers identify and monitor emerging risks and co-operate on approaches to address them.  

The most significant risks arising from the conduct of financial institutions include: fees and poor-value financial products and services, ineffective disclosures and dishonest sales practices, and inappropriate financial advice and failure to assess whether a product is suitable for a particular consumer.

The most significant risks stemming from the characteristics and circumstances of consumers include: lack of financial literacy, over-indebtedness - exacerbated by inflation, high interest rates and new forms of credit - and lack of digital capability.

The most significant risks caused by the broader operating environment include: inflation and rising interest rates, financial scams and frauds, and new business models and digital innovation. 

The G20/OECD Task Force on Financial Consumer Protection serves as a forum for policy makers to exchange perspectives on current and emerging risks and opportunities facing financial consumers, to develop standards and policy guidance, and to collect data.

Vulnerable consumers are those more susceptible to experiencing financial difficulty either because of the market they are in, the financial products they purchase or their attributes or circumstances. Financial shocks, for example, can cause many to experience financial vulnerability, regardless of their prior circumstances.

One way to support consumers experiencing vulnerability is through access to consumer protection hardship arrangements. The COVID-19 pandemic clearly showed the importance of appropriate hardship arrangements for consumers experiencing financial difficulty. These hardship measures were most effective when implemented quickly and with a high degree of flexibility to provide short-term relief to mitigate the impact of emergency measures.

The G20/OECD Task Force on Financial Consumer Protection is currently undertaking work to understand how authorities are defining and responding to the vulnerability of consumers of financial products and services.