The European Economic and Social Committee wants to reinforce consumers' rights on unfair mortgage-related practices

According to the European Economic and Social Committee members, the new financial products and a fragmented market have created a confusing situation for consumers. Therefore, the EESC wants to create a new framework whereby consumers and borrowers are aware of which products they engage in and their rights and remain fully protected, especially within the EU mortgage market.

During its July plenary session, the EESC has adopted two opinions to reinforce consumers' rights against unfair and opaque financial and mortgage-related practices. On the Opinion on Financial education and responsible consumption of financial products, EESC members believes that the better consumers are informed, the better use of financial services they will have. Given the fragile position of the retail consumer, the complex financial instruments and the occasional misbehaving of the financial sector, supporting the needs of financial-product users should be the mainstream approach. Thus, the EESC is decided that financial awareness should be improved through education, which should especially be reinforced in school curricula.

With regard to the second opinion adopted, EESC members agreed that the EU mortgage market needs a single market approach. On the Commission's proposal presented in April with the aim of restoring consumer confidence and financial stability through an efficient and competitive single market, EESC members believes that such proposal submitted does not go far enough to achieve that goal. According to the EESC opinion, a high level of consumer protection should be achieved, borrowers should be adequately informed about possible risks concerning their operations and all financial institutions should stick to their corporate responsibility. In addition, they underlined that measures aimed at ensuring responsible lending are not enough in themselves to improve market conditions and help to prevent over-indebtedness.

The European Economic and Social Committee asked for two new pieces of legislation aimed to help to harmonise the EU mortgage market and explain to consumers their rights concerning new financial products.