Financial Supervisory Authority’s role in customer protection

The objective of the Financial Supervisory Authority (FIN-FSA) is to ensure that supervised entities’ procedures are appropriate and that the information given to customers is of good quality.

The FIN-FSA is not vested with the power to resolve juridical disputes between customers and service providers, such as disagreements over an obligation to pay damages or the contents of a claim decision. The FIN-FSA, moreover, cannot act as the agent of an individual customer in resolving problem situations.

In supervision of procedures, the FIN-FSA focuses particularly on activities in which problems affect large groups of customers. The aim of supervisory measures is to have a positive impact on the entire customer base.

Supervisory measures are primarily proactive, for example the instructions and regulations given to supervised entities aimed at guiding their activities and procedures. The FIN-FSA also carries out ex-post inspection activities.

When problems arise, it is always advisable to turn first to the service provider whose operations you are dissatisfied with. If your contact with the service provider does not yield the desired result and your case concerns banking, insurance and investment matters, you can turn to the Financial Ombudsman Bureau (FINE), which provides advisory services and will investigate disputes with the service provider on your behalf, if necessary.

Service provider’s procedures

Customer due diligence obligation

Service providers must know their customers and verify their identity. In this way, service providers confirm who they are dealing with and on whose behalf and with whose funds transactions are made. Customer due diligence also requires sufficient and appropriate information to be obtained on the nature and extent of their customers’ activities. Financial service providers have the right and obligation to obtain such information on their customers as is necessary to determine their customers’ financial position. With this information, service providers are able to assess the nature of services the customer needs.

If the customer is an investor, the customer’s previous investment experience will be examined. Similarly, if the customer is a credit customer, the service provider will request information on the customer’s income, expenses, assets and other liabilities. In that case, the customer’s credit history will also usually be checked.

Obligation to provide information

Service providers are obliged to provide their customers with information on themselves as well as on their products and services. In addition, service providers must explain to the customer the key terms and conditions of the contract.

Although the service provider’s obligation to provide information is generally very extensive, you should also check the service provider’s background carefully and become acquainted with the features of the product or service offered and the terms and conditions of the contract.

If you have difficulties acquiring information on the service provider or you suspect that the information provided is inaccurate, look for another service provider. You must clarify any matters that are unclear before making a final decision, particularly if you do not understand all the features of the product or all the terms and conditions of the contract.

Confidentiality obligation

Service providers are bound by legal provisions on confidentiality and processing of personal data. They can only use and disclose your information as regulated by law.

Service providers can only disclose your customer information with your consent or to authorities that have a legal right to access the information. Authorities entitled to access customer information include

  • Financial Supervisory Authority
  • enforcement authority
  • preliminary investigation authorities and
  • tax authorities