Vulnerable consumers in financial services and access to justice

2020 ◽  
pp. 68-84
Author(s):  
Sarah Brown
Keyword(s):  
Financial Services ◽  
Access To Justice ◽  
Vulnerable Consumers

scholarly journals PROPERTY-SYNDICATION INVESTMENT V PROPERTY SCAM: WHO DECIDES? A CRITICAL EXAMINATION OF THE REGULATION OF PUBLIC-PROPERTY SYNDICATION SCHEMES IN SOUTH AFRICA

Obiter ◽  
2021 ◽  
Vol 34 (2) ◽  
Author(s):  
Tanya Woker
Keyword(s):  
Financial Services ◽  
Essential Element ◽  
Critical Examination ◽  
Investment Portfolio ◽  
Public Property ◽  
Reserve Bank ◽  
Investment Opportunities ◽  
Full Picture ◽  
Vulnerable Consumers ◽  
The Individual

Building an investment portfolio is an important part of saving for retirement. This not only benefits the individual concerned but it also has benefits for the economy as a whole. Investment in property is regarded as an essential element of an investment portfolio and many investors have over the years invested in public-property syndications. Unfortunately such investments have proved to be very risky and there have been some spectacular failures with severe consequences especially for elderly, vulnerable consumers. There is a need to ensure that all investment opportunities are properly regulated and different aspects of property syndications are regulated by different regulators including the Reserve Bank, the Department of Trade and Industry, the newly established Consumer Commission and the Financial Services Board. There seems to be some confusion amongst regulators over which entity is ultimately responsible for ensuring that such investments are sound and reliable and that consumers can have faith that they are not investing in a scam. The fact that no one regulator is responsible for overseeing the full picture is problematic because it enables the unscrupulous to slip under the radar and avoid detection. This paperseeks to consider the question of which regulator is or should be responsible for regulating public-property syndications and to make some suggestions for reform going forward.

Determinants of the knowledge of the total cost of consumer loans

2019 ◽  
Vol 32 (1) ◽  
pp. 2-19
Author(s):  
Pablo Farías
Keyword(s):  
Financial Services ◽  
Design Methodology ◽  
Market Segment ◽  
Actual Knowledge ◽  
Content Type ◽  
Total Cost ◽  
Consumer Loans ◽  
Vulnerable Consumers ◽  
Advertising Exposure ◽  
Price Advertising

Purpose The purpose of this paper is to examine the influence of consumer-related and bank-related characteristics on the knowledge of the total cost of consumer loans paid by consumers and test the hypothesized relationships between them. Design/methodology/approach In order to identify the proportion of consumers who do not know the total cost of consumer loans and reasons for it in the Chilean consumer loans industry, an empirical study using a survey administered through personal in-home interviews was carried out. Findings Results show that knowledge of a consumer loans total cost is positively associated with product satisfaction as well as recent and infrequent purchases. This study also shows that a big market segment, comprising 37.2 percent of the probability sample, represents vulnerable consumers with high self-reported knowledge but low actual knowledge of the total costs of consumer loans. This study shows that this market segment has a higher use of the price-quality cue and a higher purchase frequency of consumer loans. Originality/value The present study contributes to the existing literature in the following ways. First, while previous research measured only self-reported knowledge for financial services, the present study examines actual knowledge of the total cost of consumer loans. Second, while previous research for financial services only examined the effects of the use of the price-quality cue and price advertising exposure, the present study also examines 11 other determinants, which are relevant for managers, regulators and researchers.

Prospects of an online dispute resolution framework for Islamic Banks in Malaysia

2017 ◽  
Vol 25 (1) ◽  
pp. 39-55 ◽  
Author(s):  
Umar A. Oseni ◽  
Sodiq O. Omoola
Keyword(s):  
Dispute Resolution ◽  
Financial Services ◽  
Internet Banking ◽  
Internet Survey ◽  
Islamic Banking ◽  
Financial Services Industry ◽  
Access To Justice ◽  
Content Type ◽  
Online Dispute Resolution ◽  
Services Industry

Purpose This study aims to examine the prospects of using an online dispute resolution (ODR) platform for resolving relevant Islamic banking disputes in the usual banker–customer relationship in Malaysia. It is argued that through proper regulation, such innovative dispute management mechanism would not only address some legal risks associated with banking disputes but could also prevent reputational risks in the Islamic financial services industry. Design/methodology/approach Based on an internet survey, responses were obtained from about 109 respondents in Malaysia. The data obtained were subjected to multivariate statistical analyses considering factors such as access to justice, attitude of stakeholders, resolving disputes, practical issues and understanding of ODR. Findings The results obtained showed that “access to justice”, “attitude of stakeholders” and “resolving disputes” are the most influencing factors affecting the intention to use ODR among stakeholders, particularly customers and bankers in the Islamic financial services industry in Malaysia. Practical implications This study provides a way in which the recently introduced Islamic Financial Services (Financial Ombudsman Scheme) Regulations 2015 can be better enhanced to cater for internet banking disputes which might require an ODR framework. Originality/value Though there have been numerous studies on the dispute resolution framework in the Islamic banking industry in Malaysia generally, the current study focuses on a less explored framework – ODR– a new framework for handling banking disputes.

Kann guter Verbraucherschutz finanzielle Bildung ersetzen?

2021 ◽  
Vol 90 (1) ◽  
pp. 125-138
Author(s):  
Sally Peters ◽  
Hanne Roggemann
Keyword(s):  
Decision Making ◽  
Information Asymmetry ◽  
Consumer Protection ◽  
Financial Services ◽  
Bargaining Power ◽  
Financial Education ◽  
Limited Range ◽  
Social Contexts ◽  
Vulnerable Consumers ◽  
The One

Zusammenfassung: Finanzdienstleistungen werden im Regelfall zwischen Parteien mit einem ungleichen Status abgeschlossen. Diese Ungleichheit resultiert aus der Informationsasymmetrie und der Entscheidungshoheit über die angebotene Produktpalette. Dies beschränkt die Verhandlungsmacht auf Seiten der Verbraucherinnen und Verbraucher. Durch finanzielle Bildung kann ein Beitrag geleistet werden, um Informationsasymmetrie zu reduzieren. Auf Seiten des Verbraucherschutzes begegnet der Gesetzgeber dieser Ungleichheit mit Regulierungen im Bereich der Informations- und Beratungspflichten. Kritisch bleibt aber, dass durch die Entscheidungshoheit über die angebotene Produktpalette, gerade für rupundbare Verbraucherinnen und Verbraucher, die womöglich hinsichtlich ihres Geldbedarfs unter einem besonderen Leidensdruck stehen, das Angebot im Bereich der Finanzdienstleistungen beschränkt ist. Insofern müssen finanzielle Bildung und Verbraucherschutz hier Hand in Hand gehen, um zu vermeiden, dass die Ungleichheit in der Verhandlungsmacht zu Überschuldung und unverhältnismäßigen Zugangsbeschränkungen führt. Finanzieller Allgemeinbildung im Kontext des sozialen Verbraucherschutzes kommen insofern vielfältige Funktionen zu. Sie müssen soziale Problemlagen und den Umgang mit Lebensrisiken einbeziehen, sie bedürfen eines Grundlagenverständnisses und einer Sensibilisierung für die eigene Einstellung zu Geld und sie sollten die Fähigkeit und Bereitschaft zur Vertretung eigener Interessen fördern. Summary: Typically, financial services are contracted between parties with an unequal status. This inequality results from information asymmetry and the one-sided decision-making authority over the range of products offered. It thus limits the bargaining power on the part of consumers. Financial education can help reduce such information asymmetry. On the consumer protection side, legislators are countering this inequality with regulations regarding information and advisory duties. However, it remains problematic that due to the decision-making authority over the product range offered, particularly vulnerable consumers can only access a limited range of financial services. At the same time, these consumers may already be under extreme pressure in terms of their monetary needs. Therefore, financial education and consumer protection are both crucial tools to avoid inequality in bargaining power, and consequently over-indebtedness and disproportionate restrictions on access. In this respect, general financial education in the context of social consumer protection has multiple functions. It must include social contexts and how to deal with life risks, it requires a basic understanding and awareness of one’s own attitude toward money, and it should promote the ability and willingness to represent one’s own interests.

Judicial Protection of the Rights of Consumers of Financial Services

2021 ◽  
Vol 5 ◽  
pp. 89-95
Author(s):  
А. V. Efimov ◽  
Keyword(s):  
Financial Services ◽  
Judicial System ◽  
Access To Justice ◽  
Scientific Methods ◽  
Trial Procedure ◽  
Financial Organization ◽  
Consumer Access ◽  
General Scientific ◽  
Judicial Procedures ◽  
Judicial Protection

. The institution of a financial ombudsman significantly affects the procedure for protecting the rights of consumers of financial services. The problem is that the protection of consumer rights in the courts is complicated by the factual double mandatory pre-trial procedure for resolving a dispute, in which, before going to court, the consumer is obliged to contact a financial organizationand a financial ombudsman. The purpose of this article is to formulate a theoretical approach to the balance between consumer access to justice and the burden on the judicial system. Research objectives: characteristics of the consumer of financial services; assessment of the pre-trial procedure for protecting the rights of consumers of financial services; search for the optimal ratio of pre-trial and judicial procedures for protecting the rights of consumers of financial services. When writing this article, general scientific methods (system, functional, group of logical methods) and special legal methods (formal legal, legal modeling method) were applied. The article criticizes the existing procedure for protecting the rights of consumers of financial services for the imbalance between consumer access to justice and the burden on the judicial system. The author proposes the introduction of a mixed jurisdiction of disputes involving consumers, in the framework of which it is assumed that after contacting a financial organization, the consumer will have the choice of a jurisdictional body- the consumer will be able to appeal to both the financial ombudsman and the court. At the same time, the development of the institution of a financial ombudsman by improving the efficiency, efficiency and other characteristics of dispute resolution will increase its attractiveness for consumers, stimulating them to resolve disputes out of court.

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