Consumer protection and social inclusion: Mission impossible in times of crisis?

On 14 March 2014, the European Consumer Day made it clear - the crisis cannot be an excuse to dump consumer rights and flout the law. Organized by the European Economic and Social Committee (EESC)¹ and the Greek Consumer Protection Centre (KEPKA) in Thessaloniki, a conference brought together policymakers and consumers from member states to discuss how the current crisis jeopardizes consumer rights.

With the European Parliament elections and European Commission renewal approaching, the European Consumer Day called for action: the recent financial crisis has meant consumers are grappling with social conditions that lower their purchasing power and in consequence hamper economic recovery. Consumer rights cannot be marginalized.

Consumer protection at stake

The most essential sectors for consumer well-being are often the most troublesome, where costs are rising. Market liberalization (e.g. in the energy sector, communication or financial services) has often led to increasingly powerful oligopolies and concentrated markets. More than ever, consumers need official support against market failure and business malpractice.

“In times such as these, consumers should be at the heart of the recovery. We must make sure they are not exploited and that they get the best deal possible. More than this, by helping consumers we can make consumer policy a policy for economic recovery", said Neven Mimica, European Commissioner for Consumer Policy.

Consumer rights in crisis at a time of crisis

In times of crisis consumers still have their rights. These rights are legally binding. Even a prolonged crisis cannot be used as an excuse for lack of enforcement. The EU already has a wealth of legislation on consumer protection, but EU laws are only as effective as their implementation at national level.

"The economic crisis, poverty and the fall in consumption it has created, together with the austerity measures imposed on many EU Member States, have undermined consumers’ rights. Consumer protection policy is a growth driver and not a burden on the competitiveness of the European economy and it must be seen by policy makers as one of the key drivers of economic recovery in the EU,” stated KEPKA SEcretary-General and EESC member Evangelia Kekeleki.

Over-indebtedness and financial exclusion

Before the crisis, predatory lending practices, outrageous debt collector practices, risky investment products and hidden or very complex fees were normal practice. Since the crisis arose, consumers have been left with serious concerns about the soundness of their loans, savings and pensions. By eroding social benefits, the crisis has enlarged the group of poor people with debt problems.

“People need to learn to control their consumption. Financial education could help them to achieve proper management of their budget and to prevent over-indebtedness. But fighting over-indebtedness and financial exclusion also requires responsible behaviour on the part of professionals, regarding both their products and their advertising, together with the advice and explanations they give to consumers, ” said Martin Siecker, president of the INT Section at the EESC.

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