The European Banking Authority publishes report on mystery shopping activities of national authorities

• This publication is the EBA’s first step in the fulfilment of its new coordination mandate on mystery shopping activities of National Competent Authorities (NCAs);
• It summarises the most common approaches taken by NCAs on mystery shopping, presents some lessons learned, and identifies good practices;
• Mystery shopping allows NCAs to obtain greater insight into the conduct of financial institutions. The latter are then encouraged to take corrective actions and to better comply with applicable requirements, thus eventually enhancing the protection of consumers.

The European Banking Authority (EBA) published today a Report on the mystery shopping activities of NCAs. The EBA collated mystery shopping activities by NCAs with a view to share experiences, learn valuable lessons, and identify good practices for the benefit of the EBA and NCAs that use or intend to use mystery shopping in the future.

The Report covers mystery shopping initiatives of NCAs in respect of products that fall within the scope of action of the EBA’s consumer protection mandate, which are consumer credit, mortgage credit, deposits, payment services, electronic money, and payment accounts. It summarises the most common approaches used by the NCAs, based on the information collated primarily covering the period from 2015 to 2020. It does so by reviewing three key characteristics of mystery shopping activities: their objective, subject matter and product scope, the methodologies used by NCAs, and the follow-up actions after the mystery shopping was concluded. The Report also identify some lessons learned and sets out good practices.

At this stage, only a limited number of NCAs carried out such mystery shopping activities in their jurisdiction. Moreover, some NCAs reported that discussions are currently taking place at national level on the possibility of adding such powers to relevant competent authorities’ mandate, for some of them as part of the implementation of the EU Consumer Protection Cooperation Regulation.

Regarding the lessons learned, the Report explains that mystery shopping allows NCAs to obtain greater insight into the conduct of financial institutions. This, in turn, encourages them to take corrective actions better to comply with applicable requirements, and eventually enhances the protection of consumers. Among the good practices identified by the NCAs, most of them concern common procedural aspects such as organising training for NCAs’ inspection and supervisory staff,  identifying target customer profiles, and defining agreed ‘rules’ of customer’s behaviour.

Legal basis

The EBA publishes this Report as a first step to fulfilling the new mandate it received on 1 January 2020 in Article 9(1) of the EBA Founding Regulation. The mandates requires the EBA to ‘coordinate mystery shopping activities of competent authorities, if applicable’.