Rationale and Aims
The European Commission has issued a useful Communication:
http://ec.europa.eu/internal_market...
An extract:
The need for consumer education has become increasingly evident at European level. A number of developments including globalisation, completion of the European single market, new information technologies combined with increasingly sophisticated strategies for promoting complex products, place significant demands on consumers trying to make considered and rational choices. This is particularly true in the financial services area, which is especially complex due to its rapid rate of development and the emergence of new products. At the same time, and integral to the day to day functioning of all consumers, particular skills and knowledge are required by consumers to grapple with everyday decision-making. Never before were so many consumers obliged to deal with their financial services business on an individual basis. For example, state pensions are less likely in the future to be able to provide a satisfactory standard of living and the trend is for consumers to become responsible for providing for their retirement. These developments will continue and consumers face the challenge of financial education as a lifelong learning experience, so that they can become efficient at making rational decisions from an early age and so that they will readily perceive financial affairs as a natural part of their lives. It is obvious that young people nowadays have much more financial responsibility than their parents had. However, surveys show that young, inexperienced consumers are less able to understand the nature of this responsibility than the older generation.
Experience has shown that it would be beneficial to begin the process of consumer financial education as early as possible. This is why it is essential to train the teachers to deliver financial education on a voluntary basis to children of school going age. In order to achieve this, the Commission is expanding the DOLCETA project to teacher training in financial services.
OBJECTIVES
An educated and confident consumer is capable of making reasoned and informed choices, as an individual. Such a consumer also contributes directly and indirectly to economic life and competitiveness, bringing economic benefits to other consumers in terms of price, as well as increased choice and quality. Consumers also have a collective impact when they act together. Educated and informed consumers are also able to take the advantage of protective measures and obtain proper redress when needed. Modern communication and marketing techniques and new ways of making purchases for example make it even more important that consumers are not just informed but educated as responsible consumers. Clearly, this is true in different ways for consumers at different stages in the life cycle but even quite young children are involved in consumption. They also increasingly need to understand how finances work and to develop good habits from a young age to avoid problems later and young adolescents are particularly vulnerable. Cross-border activity is important for young people living at the borders between countries but with the internet cross border activity is becoming far more common and young people are at the forefront of this new form of consumption.
For all consumers, but especially for young children and young people, information is not enough – it is too passive. What is required is education – an active participation in a process of reflection and engagement with the sometimes conflicting pressures and interests between society and the individual. Consumer education should address attitudes, knowledge and competences to help them understand why and how to perform with confidence, and how to act and adapt their behaviour, both domestically and also in relation to cross-border transactions. Financial topics should be demystified for young consumers and the experience of learning financial issues should be fun for them.
In Ireland, the National Consumer Agency (NCA) http://nca.ie is mainly responsible for consumer education. Its functions are set out in Article (3) of the Consumer Protection Act, 2007 http://www.oireachtas.ie/documents/bills28/acts/2007/a1907.pdf which includes the following provisions:
- The Agency shall promote public awareness and conduct public information campaigns for the purpose of educating and advising consumers in relation to consumer protection and welfare.
- The Agency shall promote educational initiatives and activities relating to consumer information and awareness.
The NCA fulfills this mandate by compiling and publishing research in various areas of interest to consumers. It has published a number of consumer education information booklets on topics such as toy safety, small claims court and consumer law. The NCA also co-operates with the media through national TV programmes and newspaper articles. The European Consumer Centre, Dublin http://www.eccdublin.ie/ provides information on consumer rights in the EU and assists consumers in cross-border disputes.
The National Adult Literacy Agency (NALA) http://nala.ie has developed valuable resources for adults in the area of financial literacy including: A Plain English Guide to Financial Terms. The Money Advice and Budgeting Service (MABS) http://www.mabs.ie is a free and confidential service for people with debt and money management problems. MABS also produces a range of information leaflets on a wide range of financial topics.
Within the formal education system there are no formal programme for consumer education in the Primary curriculum. However, there is scope for teachers to include consumer education within the choice of topics to include in the classroom. Consumer Education is a significant component and key competence of the Junior Certificate Home Economics and Leaving Certificate Scientific and Social (Home Economics) syllabi and the Junior Certificate Business Studies syllabus.
To achieve the objectives mentioned above, young consumers need the knowledge, understanding and competences to:
- Be able to identify their own needs in relation to particular financial topics – “Wants and needs”
- Find appropriate and reliable information – “Searching and finding”
- Understand how finances function, be able to find information, take informed decisions and act appropriately to achieve objectives in the most efficient way – “Analyzing and evaluating”
- Be able to ‘shop around’ and compare different offers – “Comparing”
- Be able to make informed and responsible decisions – “Deciding”
- Be able to act effectively in relation to financial matters relevant to their needs and to be able to perform simple or more complex transactions – “Using”
- Be able to predict the positive and negative consequences of different decisions and actions, particularly the risks and dangers which are often found ‘in the small print’ – “Evaluating consequences”
- All these competencies require the ability to ask, and get answers to, relevant questions. The students cannot search and find information if they do not know which questions they should ask to get the answers they require. The global competence that is the key to all the others could therefore be:
The ability to formulate and communicate relevant questions and find appropriate answers.
The purpose of this module is not to write long explanatory courses or teach economics. We do not target teachers of economics theory. Our aim is to offer ideas, practical material and concrete methodology tools to any teacher that would like to include financial education to their lesson and to ease the preparation of these lessons. There are fact sheets on a range of relevant topics to supplement the material already on the Dolceta website in the [module Financial Services- http://www.dolceta.eu/ireland/Mod2/>, links and sources of further information, and lesson plans with teaching and learning tools addressing the competencies set out above, under 4 broad headings:
