The China Banking and Insurance Regulatory Commission (CBIRC) says it will focus on six major problems when it comes to protections for Chinese finance consumers.
At a recent press conference Guo Wuping (郭武平) CBIRC’s consumer protection chief, said that six major consumer protection problems uncovered by recent investigations included:
- Numerous problems with bank wealth management products (WMP’s) and credit cards, including guaranteed principal and returns for WMP’s.
- Marked problems with cooperation between banks and third parties, and tech platforms in particular. The client guidance costs of third party platforms are comparatively high, raising the overall financing costs for customers. There have also been problems with the use of violent debt collection methods.
- Complex nesting of trust products and inadequate information disclosures.
- Interest fees of certain consumer finance companies are excessively high. Mandatory sale of accompanying insurance by consumer finance companies. The overall financing costs of certain consumer finance customers exceeds 24%, and can even approach 30%.
- Misleading insurance sales remain a “chronic disease,” including sales agents exaggerating the returns for insurance liability.
- Excessively complex financial products that consumers are unable to understand. This is particularly the case with certain new products such as insurance for shattered mobile phone screens and air flight delays. Given that amounts are small and frequencies are high, this leads to a high level of corresponding financial risk.
Guo said that CBIRC would expand investigations into these six areas, as well as undertake consumer education campaigns to raise public awareness.