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August 20th, 2012

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From now on a consumer ombudsman will help banking customers navigate the financial institutional jungle that includes personal accounts, debit cards, credit cards and loans.

The initiative by the Business and Growth Ministry is just one of 23 points of a plan of action that is aimed at simplifying life for the consumers of Denmark.

The ombudsman, in collaboration with state financial watchdog Finanstilsynet, will be able to check the pricing policies of Denmark’s financial institutions and therefore negate the special status that financial intuitions have enjoyed for the past decade.

Up until 2002 it was the consumer ombudsman that monitored the bank pricing policies, but following a conflict between then ombudsman, Hagen Jørgensen and the financial institutions, parliament shifted the responsibilities to Finanstilsynet.

But Finanstilsynet has been heavily criticised for not doing enough, and the move by the government to have them share their responsibilities with the ombudsman has been met with praise.

“There has been many errors in the banks’ pricing information over a number of years due to a lack of effective control,” John Norden, director of Mybanker portal told Politiken newspaper. “It’s more natural that the ombudsman monitors the banks, just as he does with many other trades.”

Finanstilsynet recently checked out 30 banks and found errors in 29 of them; and Henrik Øe, who has been the consumer ombudsman since 2006, will be relying on a solid cooperation with Finanstilsynet to handle the issue.

“Together with Finanstilsynet, I can better monitor whether the banks comply with the rules. I am already authorised to see if the banks have acted responsibly,” Øe told Politiken. “Hopefully we will see fewer cases of banks using misleading marketing tricks in the future.”

Business and Growth Minister Ole Sohn (Socialistisk Folkeparti) is under no impression that the banks will celebrate the initiative, but contended that using the consumer ombudsman will greatly benefit the consumers in the country.

“It is essential that the banks provide accurate and transparent information, and perhaps the banks think we’re getting to close to them, but the banks are here to service their customers,” Sohn told Politiken. “And they must do it in a manner so that customers understand the consequences of the products they are offered.”

The 23-point action plan initiated by the Business and Growth Ministry will, over the course of this autumn and spring of next year, be developed into a concrete law.

“The whole plan about strengthening the ombudsman’s position in regards to the marketing laws is that consumers receive the best products to the best price, and we shift the business arena in a direction where competition is fair,” Sohn told Politiken.