Consultation response
As the EU prepares to update Europe’s consumer protection laws for the digital age, Finance Watch is calling for strong, binding rules to ensure that the digital marketplace for retail finance consumers is safe and fair.
What is the Digital Fairness Act?
The Digital Fairness Act is a proposed EU regulation aimed at updating and strengthening Europe’s consumer protection laws for the digital age.
Why digital fairness matters
Consumers of retail financial services are increasingly exposed to a variety of misleading tactics, such as deceptive design patterns, addictive features and personalised marketing practices, that exploit their vulnerabilities.
Without robust consumer protection mechanisms, these practices put consumers, especially vulnerable populations, at risk of discrimination, mis-selling, unfair pricing and data privacy risks that can lead to serious financial harm and even overindebtedness.
Finance Watch recommendations for the Digital Fairness Act
In response to the European Commission’s public consultation on the Digital Fairness Act, Finance Watch is calling for strong, binding rules to ensure that the digital marketplace for consumers of retail financial products and services is safe, fair and transparent.
- Protect consumers from manipulative and addictive design. Prevent the use of dark patterns and addictive gamified features that pressure or nudge consumers into risky financial decisions, and ensure these protections cover high-risk financial products, such as retail investments and consumer credit.
- Promote transparent and honest pricing. Increase transparency by ending the adding of fees over the course of a transaction, known as drip pricing, and restricting real-time price changes based on demand. Prohibit personalised pricing practices based on what a firm believes an individual consumer can be persuaded to pay.
- Ensure fairness in digital marketing and personalisation. Outlaw algorithmic, data-driven personalised advertising practices that target consumers with harmful or unsuitable financial products and prohibit influencer marketing of risky financial products, including crypto assets and consumer credit.
