May 11
Trajan Shipley
4th May 2021
Banking & Finance Consumer, Health & Environment

EBA publishes report on NCAs’ supervision and investigation for consumer protection and financial activities

The European Banking Authority (EBA) has published a report on the mystery shopping activities of national competent authorities (NCAs), on the basis of Article 9(1) of the EBA Founding Regulation. That Article requires the EBA to ‘‘take a leading role in promoting transparency, simplicity and fairness in the market for consumer financial products or services across the internal market’, which further to a review of that Regulation includes the mandate to coordinate such mystery shopping activities. 

According to the report, only a limited number of NCAs carried out such mystery shopping activities in their jurisdiction. In most cases, mystery shopping is part of a standard on-site supervision or a targeted or thematic investigation carried out by NCAs. With regard to the methodology used in mystery shopping activities, the EBA highlights that they are mostly conducted on site or via the internet and are limited to the pre-contractual phase and the collection of information on the practices of the sellers for potential consumers.

The report concludes summarising the main benefits and challenges identified by the EBA. With regard to the benefit, it highlights that mystery shopping allows NCAs to get first-hand experience of the interaction between consumers and financial institutions, as well as obtain faster results. Current challenges include the risk of exposure of individuals during the performance or limited time and human resources to carry out mystery shopping exercises alongside other supervisory work.

The full report is available here.


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