MEDIA
RELEASE
FSB to promote consumer education
The Financial Services Board (FSB) has established a task
group to promote the education of users of financial products and services in
South Africa.
The group, comprising senior staff of the FSB as well as a representative of the
Consumer Institute, has formulated a strategy for advocating consumer education.
The increasing emphasis in regulation on assuring fair treatment of users of
financial products and services is recognised. To that end, the Financial
Services Board Act, 1990 has been changed to extend its mandate to “promote
programmes and initiatives by financial institutions and bodies representing the
financial services industry to inform and educate users and potential users of
financial services and products.”
FSB executive officer Rick Cottrell, says the requirement for consumer education
and the FSB’s role in promoting it, is based on the premise that educated
consumers foster the development of a healthy and vibrant financial services
industry.
“In South Africa where a large proportion of the population does not access
the formal financial sector, there are additional needs. While the FSB will
promote consumer education, it is up to the financial services industry to run
with it.
“The purpose of consumer education is to promote knowledge of personal finance
and the products available for existing users, and those who do not yet make use
of such services.
“It is also to alert consumers of the risks involved in existing products and
the dangers of dealing with unregistered product suppliers, intermediaries and
other unscrupulous operators.
“Consumer education will also provide an awareness of consumer rights, the
remedies available to the consumer and, when required, the opportunities for
dispute resolution.”
Cottrell says the FSB’s strategy recognises the need to distinguish between
“promoting” consumer education and direct involvement in the project which
will be introduced in phases.
“Firstly it will involve consultations with industry bodies and
individual institutions to determine their commitment to a consumer education
programme, the extent to which finance will be available and the potential for
the FSB to establish partnerships to execute the plan.
“Secondly the aim will be to get an understanding of the nature and extent of
the problem so as to focus the resources available on those areas where the
needs are greatest. This will be achieved by surveys on an industry-by-industry
basis.
“The survey will aim at ascertaining the nature and extent of knowledge of the
financial products and services available to different elements of the
population and how those who are already consumers came to their buying
decisions.
“Other objectives are determining the confidence of existing or potential
consumers of financial products and services, the barriers that exist for those
who are not yet consumers, what consumers look for in suppliers of financial
products and services and any concerns regarding the products or services
itself.
“At the same time the nature and extent of consumer education programmes being
provided by or proposed to be provided by the full media spectrum will be
ascertained.
“It will be necessary to liaise with the Department of Education to
incorporate relevant elements of consumer education into school curricula on
life skills. A further initiative can be to incorporate money and financial
matters into the examples used in teaching mathematics,” Cottrell added.
Issued
by Russel Michaels
Manager: Communications & Liaison FSB
Wednesday 29 March 2000
Tel (012) 428 8025 / 083 281 2954
E-mail:
russelm@fsb.co.za