Hungary: focus on competition in financial services

A number of recent events have combined to put the financial services sector under close scrutiny from the competition authorities:

• In its recent report, the EU Commission identified concerns about competition in the financial services sector in relation to payment systems, credit registers; cooperation between banks; price setting and policy making.
• When announcing its own enquiry into the financial services sector in February 2007, the Hungarian Competition Office drew attention to the relative rarity of consumers or SMEs changing service provider in relation to certain banking products, and is now collecting more information from market participants to establish whether or not competition is being restricted or distorted in these areas.
• HCO has brought proceedings against OTP Bank, CIB Bank and MKB Bank for misleading consumers about credit card products when promising them interest-free spending for up to 45 days. It has already decided that OTP Bank misled customers in some of its advertising leaflets by not informing them that interest-free spending was subject to further significant conditions.
• HCO also published its intention to bring proceedings in the near future against several other banks for possible deficiencies in the information provided to consumers when selling credit card products.
• HCO has signed a cooperation agreement with the civil rights ombudsman and the Hungarian Financial Supervisory Authority to improve their treatment of consumer claims in the financial services sector by passing on issues brought to them which fall within one of the other’s remit of one and by taking joint action where appropriate