The Responsible Consumer in the Digital Age: On the Conceptual Shift from ‘Average’ to ‘Responsible’ Consumer and the Inadequacy of the ‘Information Paradigm’ in Consumer Financial Protection

Abstract

The article 1 argues that the ‘information paradigm’, within which the concept of ‘average’ consumer operates, is unfit to provide adequate financial protection to consumers in the aftermath of the 2008 financial crisis and in the wake of the digital age. As the complexity of financial and digital financial services increases, consumers are expected to educate themselves and become financially literate, while traders’ liability and state intervention are reduced to a minimum. ‘Average’ consumers are turned into ‘responsible’ ones. Using as examples the Mortgage Directive and European Securities and Markets Authority (ESMA)’s position on Initial Coin Offerings (ICOs), the article shows that the former ‘paternalistic’ attitude towards consumer protection in both EU legislation and policy making was replaced with a ‘self-help’ approach and contests the general wisdom regarding consumers’ ability to participate in financial markets or understand the risks posed by novel products and services facilitated by technical innovation and digitization. The article calls for a reconsideration of the information paradigm and for a pro-active approach of the EU regulatory bodies to provide consumers with efficient protection.