Kuneva under fire over retail scoreboards

Attempts by Meglena Kuneva, the European commissioner for consumer protection, to extend her regulatory remit have drawn hostile reactions from the financial services industry.

The industry, which is already under intense scrutiny from the Commission's competition and internal market departments (DG Comp and DG Markt), is feeling the heat from consumer regulators with the recent launch of MarketWatch, a scoreboard put together by the health and consumer protection department to encourage greater competition in retail markets.

Kuneva is currently discussing with Charlie McCreevy, the commissioner for the internal market, how to iron out problems in the banking and insurance sectors, after MarketWatch last month highlighted such issues as product-tying and excessive management fees.

Industry insiders claim that Kuneva is confusing the regulatory landscape by treading on terrain that has up to now been dominated by McCreevy and Neelie Kroes, the commissioner for competition. MarketWatch, they say, overlaps with existing initiatives such as the single market review and ongoing sectoral investigations.

Even before the launch of MarketWatch, the banking industry had begun drafting, at McCreevy's behest, common rules that would make it easier for consumers to switch accounts. A deadline of mid-2008 was set. McCreevy threatened to draft legislation should the new rules prove inadequate.

"The timing is not particularly helpful," said one industry source. "We need more detail from DG Sanco on what they plan to do. It seems that, in the screening process, they've just taken DG Comp and DG Markt results and obviously come to the same conclusions."

Sebastian de Brouwer, head of the legal department at the European Banking Federation, said: "DG Markt called on industry to act on the issue of switching [bank accounts]. On the one hand we have a request to act quite quickly. On the other hand they [DG Sanco] say they will investigate further and collect more data, though granted the scope of their investigation is wider."

Kuneva's spokeswoman said that collaboration between DGs would "increase pressure on industry for measures to be delivered on time and to a high standard". "She [Kuneva] wants to underline the high political importance she attaches to it and to send a clear message to industry that the first point of delivery for her will be the code on switching. It is an important test as to whether the banking industry is serious about and capable of dealing with consumer issues in a self-regulatory way," the spokesperson said.

Kuneva last month identified financial services as a priority area for future action. According to MarketWatch figures, average fees for the management of bank accounts vary from Û0 to Û80 a year. More than a third of people across the EU find it difficult to compare offers between banks.

The MarketWatch scoreboard will be discussed by EU industry ministers next week (25 February) at a meeting of the Competitiveness Council.

Attempts by Meglena Kuneva, the European commissioner for consumer protection, to extend her regulatory remit have drawn hostile reactions from the financial services industry.