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PHARE Transition Facility Twinning Light project Fiche

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					PHARE / Transition Facility Twinning Light project Fiche

Project Title                  Strengthening of Consumer Rights Protection in the Area of
                               Consumer Credit

Project Number                 2006/018-183-04-01-08
Twining Light No.
Funding Programme              2006 Transition Facility/ Unallocated Envelope
Beneficiary Institution        State Consumer Rights Protection Authority, Vilnius street
                               25, 01119 Vilnius, Republic of Lithuania
Maximum Budget                 0,18 MEUR


1.    Background and justification

     The comprehensive monitoring report (2003) on Lithuania‟s preparation for the membership stated
     that the legislative alignment in the field of financial services has been largely completed. However,
     in order to protect consumers‟ economic interests effectively in the field of financial services
     (especially consumer credit) a big attention must be paid especially to the strengthening of
     administrative structures.

     Consumer credit has a crucial importance for consumers in their daily lives. On the other hand,
     consumer credit is a complex area both for consumers and creditors. The State Consumer Rights
     Protection Authority seeks to strengthen confidence in consumer credit, as consumer credit forms the
     biggest part of the financial sector. Due to the expansion of financial services‟ market the State
     Consumer Rights Protection Authority aims to ensure high level of consumer rights protection in the
     field of consumer credit. The demand for consumer credit is growing quickly; consumers sign more
     consumer credit contracts, and the market of credit cards is expanding very fast. In view of the above
     mentioned factors and the aim to ensure the high level of Consumer Protection, it is important
     strengthen the administrative capacities of the main enforcement bodies – the State Consumer Rights
     Protection Authority, creditors and nongovernmental organizations (further – NGO‟s).

     In the recent years the types of credit offered to and used by consumers have evolved considerably.
     New credit instruments have been developed, and their use continues to increase. It is therefore
     necessary to amend existing provisions and to extend their scope, where appropriate.

     In order to evaluate the development of consumer credit and to find out what kind of new consumer
     credits have appeared in Lithuanian market, and to compare them with consumer credit products in
     the European Union (further – EU), the following has to be done:
             - carry out an analysis of consumer credit market in Lithuania and examine the provisions
                that regulate consumer credit products following the best practice of the Member States.

     The Commission adopted on 28th of October 2004 a modified proposal for a Directive on Consumer
     Credit following the opinion voted by the European Parliament (EP) on 20 April 2004. After the
     modified proposal was published, the Commission continued consultation with Member States and
     stakeholders. As a result, the Commission concluded that a consolidated text would be useful. In
     addition the consultations showed the need for further substantial modifications in order to avoid
     unintentionally burdening consumer credit business whilst at the same time ensuring a high level of
     protection for consumers. The Commission has three main objectives in the area of consumer credit:
           – establishing the conditions for a genuine internal market,
           – ensuring a high level of consumer protection, and
           – improving the clarity of EC regulation by recasting the three existing Directives on
               consumer credit (87/102/CE, 90/88/CE and 98/8/CE).
                                                                                                        1
Harmonization of consumer protection provisions in the area of retail financial services, coupled with
targeted mutual recognition, is a key aspect of the Commission strategy for developing the retail
financial services market.
The Consumer Credit Directive 87/102/EC, based on minimum harmonisation, resulted in Member
States going beyond the Directive‟s provisions to a different extent. As the relevant provisions are
mostly of a mandatory nature, these differences in national legislations constitute obstacles to the
internal market and dissuaded business to offer pan-European products. Consequently, a legislative
initiative was the only available option to meet the objectives. Enhanced competition and opening of
national markets to foreign creditors will lead to lower interest rates for consumers. Prices of
consumer credit vary widely according to the creditor and from one Member State to another, and
consumers should be put in a position to take advantage of offers throughout the EU territory.
Removal of barriers to competition will lead to a broader range of offers and improved products. The
level of innovation is already quite high in some Member States; however certain credit products
available in a given Member State can, in many cases, not be sold elsewhere in the EU. It is the
interests of consumers to have access to all credit products available in the EU, while being
guaranteed a high level of information and protection.
Harmonization of certain key elements of the consumer credit agreement will improve consumer
confidence and encourage consumers to buy credit across borders in the EU. The current low level of
cross-border consumer credit agreements is also due to concerns regarding the level of consumer
protection in foreign Member States.
Common position regarding the new Consumer credit directive was adopted on the 20 th of September,
2007 with a view to adoption of a Directive of the European Parliament and of the Council on credit
agreements for consumers and repealing Council Directive 87/102/EEC (further – new Consumer
credit directive).
At the moment consumer credit provisions in Lithuania only regulate the definition of consumer
credit, the contractual information that is compulsory, related credit agreements and so on. The State
Consumer Rights Protection Authority solves disputes between consumers and creditors in the field of
consumer credit, but at the moment there are no penal provisions for those individuals who violate
consumer credit regulations. State Consumer Rights Protection Authority‟s solutions are not
compulsory, so creditors do not have to implement them. The laws do not provide for any infliction
procedures in the field of consumer credit. Paying attention that new Consumer credit directive will
come into force in the short run State Consumer Rights Protection Authority would like to prepare
itself for the implementation of the mentioned Directive.

In order to develop the scheme of alternative dispute resolution and infliction procedure in the field of
consumer credit regarding the new Consumer credit directive following has to be done:
    - evaluate and analyze the provisions in the field of disputes resolution and infliction procedure
       in the EU according to the best practice of Member States in order to prepare State Consumer
       Rights Protection Authority for the implementation of the new Consumer credit directive.
    - prepare the recommendations (draft) of the provisions of disputes resolution and infliction
       procedure according the best practice of the Member States in order to prepare State
       Consumer Rights Protection Authority for the implementation of the new Consumer credit
       directive.

The market for credit has a potential to develop; currently only a small part of it is cross-border. The
considerable overall size of the credit market conceals a large diversity between markets, where levels
of consumer credit vary considerably. The possibility to offer credit contracts throughout the EU
should result in improved efficiencies and economies of scale for banks and a cheaper and wider
selection of products for customers. Lenders will be able to design pan-EU consumer credit products.
New business opportunities are arising to harness the potential of the internal market – technology (in
particular the Internet) allow consumers and creditors to conclude distance contracts, and the new
demand for credit may arise from the increase in retail sales over the Internet, growth in access to

                                                                                                       2
   Internet is stimulating e-banking. Due to the mentioned it is very important to develop the consumer
   credit database system in order to get and to provide data to creditors about the creditworthiness of
   consumers. It is very important to ensure that the cross border creditors would be able to get the data
   about consumers from Lithuania if they are going to take credit from a creditor of a Member State.
   In order to ensure provision of information about creditworthiness of consumers to the EU suppliers
   of consumer credit on their request regarding the new Consumer credit directive the following has to
   be done:
       -   analyze current situation of credit database system in EU following the best practice of the
           Member States in order to prepare State Consumer Rights Protection Authority for the
           implementation of the new Consumer credit directive .
       -   prepare recommendations on implementation of the consumer credit database system of
           creditworthiness of Lithuanian consumers in order to prepare State Consumer Rights
           Protection Authority for the implementation of the new Consumer credit directive.

   There are 100 employees working in the State Consumer Rights Protection Authority in 2008. 20 of
   them work with consumer credit.

   In order to ensure high qualification of the employees of the State Consumer Rights Protection
   Authority, and increase knowledge and skills of consumers, consumer credit providers and
   nongovernmental organizations (NGOs) regarding the new Consumer credit directive the following
   has to be done:
       - organize study visit for the representatives of the State Consumer Rights Protection Authority.
       - organize seminars for the staff of the State Consumer Rights Protection Authority, consumers
           and consumer credit providers and NGOs.


Summary of the linked activities

       The reforms of consumer protection and market surveillance system has been supported and
financed by PHARE project “Strengthening Administrative Capacity of the National Consumer Rights
Protection Board and Promotion of Activities of Public Consumer Organizations”. Project Number:
2003.004-341.06.01. The main task of this project was to strengthen consumer protection in Lithuania in
line with relevant EU acquis according to EU Member States best practices. The main purpose included
approximation of the Lithuanian legislation to the Directives and other legal regulations concerning the
new consumer protection Acquis according to the best practices of the EU Member States, improvement
of administrative capacity of the National Consumer Rights Protection Board (further – the Board; from 1
March 2007 State Consumer Rights Protection Authority) and ensuring effective operation of the Board
and other market surveillance institutions, adequate consumer protection and enforcement of coherent
strategies on consumer protection, consumer education and co-operation between the state, public and
private sectors in this field.
After the completion of the project these results were achieved:
        - All planned trainings were organized in the field of implementation of the National Strategy
           for Consumer Protection, Consumer Education, and Public Relations.
        - The Board‟s website can be easily accessed by consumers since the first half of 2004.
        - Operational rules of RAPEX system created and approved by competent institutions.
        - Review of Lithuanian legislation conducted and necessary recommendations drafted.
        - Agreement for cooperation between the Board and NGOs and draft Rules for funding of
           NGOs were prepared. Board signed cooperation agreements with Consumer Rights Protection
           Centre, Citizens Advice Union and other organizations.
        - Documentation for the establishment Consumer Education Centre was prepared.


                                                                                                        3
        -   Grant agreement between the Board and the European Commission for the establishment of
            the European Consumer Centre was signed. On 15th March 2005 the European Consumer
            Centre was established and Director appointed.
        - Documentation for joining FIN-Net was prepared.
Twinning Light project and PHARE project are linked together and complement each other in the areas of
implementation and development of the Acquis in the Lithuanian laws, promoting work of consumer
protection institutions, consumer education and information.

2.    Description of the Assignment

     The beneficiaries

State Consumer Rights Protection Authority - coordinating institution during the implementation of
the project and the main beneficiary.
Vilnius str. 25
01119 Vilnius, Lithuania

Project Leader:
Feliksas Petrauskas – General Director of the State Consumer Rights Protection Authority
Tel. +370 5 262 67 51
Fax. +370 5 279 14 66
Email: f.petrauskas@nvtat.lt

Contact person:
Marekas Močiulskis – Director of Economic Interests Department
Tel. +370 5 262 67 71
Fax. +370 5 279 14 66
Email: m.mociulskis@nvtat.lt

Agnė Paškevičiūtė – Head of Financial Services Supervision Division
Tel. +370 5 212 13 32
Fax. +370 5 279 14 66
Email: a.paskeviciute@nvtat.lt

The State Consumer Rights Protection Authority operates since August 2001. The State Consumer Rights
Protection Authority coordinates activities of the state consumer protection bodies. The mission of the
State Consumer Rights Protection Authority is to ensure high level of consumer protection in the
Republic of Lithuania by developing consumer rights protection system in line with European Union law.
The strategic goal is to implement the National Consumer Protection Policy aimed to ensure effective
protection of consumer rights and work towards an adequate harmonization of the laws of the Republic of
Lithuania with the European Union legislation in the areas of Consumer Protection and market
surveillance.
      The State Consumer Rights Protection Authority's activities are aw follows:
     Coordinates activities of state institutions involved in consumer protection;
     Protects consumers' public interest;
     Carries out Alternative Disputes Resolution of consumer disputes;
     Monitors the use of unfair terms specified in consumer contracts;
     Analyzes consumer complaints about unfair contract terms;
     Coordinates and implements protection of consumers‟ economic interests, supervises market of
        consumer products and services;
     Carries out an out-of-court investigation of consumer complaints arising from consumers' disputes
        with credit providers;

                                                                                                     4
      Monitors compliance of the requirements for advertising stipulated in the Law of Advertising;
      Within its remit imposes legal enforcement measures for infringements of the Law of Consumer
       Rights Protection, the Law of Product Safety and the Law of Advertising;
    Organizes and provides education of consumers, sellers, producers and services providers;
    Provides information to consumers about unsafe products which have appeared or may appear in
       the market;
    Arranges information exchange with the European Union and the Member States;
    Represents the Republic of Lithuania in the European Union and International Consumer
       Protection Organizations.
There are 100 employees working in the State Consumer Rights Protection Authority, 20 of them work
with consumer credit.

European Consumer Center
J. Basanavičiaus str. 20-11
03224 Vilnius, Lithuania

Contact person:
Nijolė Steponkutė - Director
Tel: +370 5 265 03 68
E-mail.: n.steponkute@ecc.lt

The European Consumer Centre in Lithuania was established by the agreement of the European
Commission and the State Consumer Rights Protection Authority. The European Consumer Centre in
Lithuania helps to ensure and protect consumer rights in the following ways: informs consumers on their
rights and possible ways to settle their disputes/ complaints; provides consumers with free advice; quickly
collects extra information related to a consumer dispute/ complaint; introduces consumers with the
relevant provisions laid down in the European and national legislation; provides assistance in resolving a
dispute/ complaint in collaboration with other ECCs operating across Europe; provides consumers with
assistance in obtaining redress for the losses incurred; refers consumers to an appropriate institution when
the European Consumer Centre is not able to resolve a dispute/ complaint. The European Consumer
Centre aims to spread the information on consumers‟ rights, provide information and advice to LIthaunian
consumers when they have purchased faulty goods or services within the EU, and give advice to
consumers from the EU when they have purchased faulty goods in Lithuania, also help consumers to
resolve disputes under out-of-court settlement procedure, provide information and advice on the Internet.
The European Consumer Centre will provide experts of the project with the information about the
legislation of the EU countries regarding consumer credit. With the help of the European Consumer
Centre it will be possible to compare the Lithuanian consumer credit products with the products available
in the EU. The staff of the European Consumer Centre will be involved in arranging and participating at
seminars on consumer credit.

Consumer Education Centre
Odminiu str. 12
01122 Vilnius

Contact person:
Irena Zaleskienė – Director
Tel: +370 5 212 15 51
E-mail.: i.zaleskiene@vscinfo.lt

Consumer Education Centre was established in December 2005 aiming to improve consumer education in
Lithuania providing consumers with more information and knowledge necessary to make wise choices
when buying goods and services and resolve consumer problems. The host institution of the Consumer

                                                                                                          5
Education Centre is the State Consumer Rights Protection Authority. The main objective of the Consumer
Education Centre is to provide Lithuanian consumers with better opportunities to gain information and
knowledge about consumer rights.
Consumer Education Centre will organize seminars for the staff of the State Consumer Rights Protection
Authority, consumers and consumer credit providers, and NGOs.

    Global and Specific Objectives

The global objective of the project
To strengthen consumer rights protection in the area of consumer credit and to increase consumer
knowledge and understanding about consumer credits.

The specific objectives of the project
       - investigation of consumer credit market in Lithuania and provisions regulating consumer
           credit products according to the best practice of Member States.
       - development of dispute resolution and infliction procedure in Lithuania according to the best
           practice of the EU Member States.
       - drafting recommendations on development of consumer credit database system in Lithuania in
           order to get and provide information about creditworthiness of consumers in the EU.
       - training of the staff of the State Consumer Rights Protection Authority, consumers, credit
           providers and NGOs in the field of consumer credit and preparation of education material.

    Requested services

Activities

        -    to investigate the consumer credit market in Lithuania and find out about new credit products
             which appeared in the market following the best practice of the Member States;
        -    to review the national legislation in the field of consumer credit and prepare analysis and
             recommendations for the necessary amendments of those provisions in comparison with the
             EU best practice in the field of consumer credit in order to prepare for the implementation of
             the new Consumer credit directive;
        -    to review and analyze the information system of the consumer creditworthiness in Lithuania in
             the field of consumer credit and to make analysis and recommendations for the necessary
             amendments for the system model of consumer creditworthiness in comparison with the EU
             best practice in order to prepare for the implementation of the new Consumer credit directive.
        -    to organize 2 seminars for the employees of the State Consumer Rights Protection Authority
             (100 persons) and 2 seminars for the providers of financial services and NGOs (100 persons)
             in the field of consumer credit regarding the new Consumer credit directive, and prepare the
             training material .
        -    to prepare consumer education material in order to raise consumer awareness of their rights
             and responsibilities in the area of consumer credit regarding the new Consumer credit
             directive, etc. – material for the booklet about consumer rights in the field of consumer credit
             after the adoption of a new Consumer credit directive.

The preparation of the material for the booklet would be one of the ways to implement the measures set
out in the Strategy of the State Consumer Rights Protection Authority for 2007-2010, i.e. „to distribute
publications intended for consumers on consumer related issues‟. The above mentioned educational
materials will be distributed during specific seminars organized by the regional divisions of the State
Consumer Rights Protection Authority in the regions of Lithuania and Consumer Education Centre.

        -    to organize 1 five days study visit for 5 representatives of the State Consumer Rights
             Protection Authority. The aim of the study visit would be to strengthen administrative capacity
                                                                                                           6
             and to share the best practice in the area of consumer credit regarding the new Consumer
             credit directive.

Though the key activities will be carried out in Lithuania, it is very important to enable representatives of
the State Consumer Rights Protection Authority to become familiar with the practice of consumer credit
development in other countries and to exchange experience in the sector of consumer credit. It would be
useful to visit the relevant institutions of consumer credit providers and related institutions in order to see
how the dispute resolution system in the field of consumer credit and consumer creditworthiness is
adapted in other countries, i.e. to learn how the ministries draft legislation on the basis of which those
procedures are prepared, how these procedures are implemented by creditors, and what role the
monitoring institutions play in this process. The delegates of the study visit would like to learn about
foreign practice implementing self-regulation mechanism in the area of consumer credit, which would be
useful in the development of the self-regulation bodies in financial sector in Lithuania.

Indicative work plan:

                           Input, man days
Activities                 Expert          Legal Expert      Economic Expert of Total
                           Project leader                    Expert   consumer
                                                                      rights
                                                                      protection
To administer and 10                                                             10
manage the project,
organize the study
visit
To investigate the                          10               10           5             25
consumer          credit
market in Lithuania
and find out about new
credit         products
appeared in the market
following the best
practice      of     the
Member States.
To review the national                      10               10           5             25
legislation in the field
of consumer credit and
make analysis and
recommendations for
necessary amendments
of those provisions in
comparison with the
best EU practice in the
field of consumer
credit in order to
prepare      for     the
implementation of the
new Consumer credit
directive.
Review and analyze                          10               10           5             25
the information system
of     the    consumer
creditworthiness      in
                                                                                                             7
 Lithuania in the field
 of consumer credit and
 to produce analysis
 and recommendations
 for            necessary
 amendments for the
 system      model     of
 consumer
 creditworthiness      in
 comparison with the
 best EU practice in
 order to prepare for
 the implementation of
 the new Consumer
 credit directive.
Organize 2 seminars                                                 15            15
for the new employees
of the State Consumer
Rights         Protection
Authority            (100
persons)       and      2
seminars for providers
of financial services
and      NGOs        (100
persons) in the field of
consumer           credit
regarding the new
Consumer           credit
directive; prepare the
training materials.
Preparation            of                10                         10            20
consumer        education
material in order to
raise           consumer
awareness of their
rights                and
responsibilities in the
area of consumer credit
regarding the new
Consumer           credit
directive, etc.; material
for the booklet about
consumer rights in the
field    of consumer
credit.
TOTAL                     10             40             30          40            120



Expected results:
-   research of the Lithuanian consumer credit market and new credit products appeared in the market in
    recent years following the best practice of the Member States performed;

                                                                                                     8
-    analysis and recommendations for the necessary amendments for the provisions of consumer credit
in comparison with the EU best practice in the field of consumer credit in order to prepare for the
implementation of the new Consumer credit directive prepared;
-    review and analysis of the information system on consumer creditworthiness in Lithuania performed;
analysis and recommendations for the necessary amendments for the system model of consumer
creditworthiness in comparison with the EU best practice in order to prepare for the implementation of
the new Consumer credit directive made;
-    2 seminars for employees of the State Consumer Rights Protection Authority (100 persons) and 2
seminars for the providers of financial services and NGOs (100 persons) in the field of consumer credit
regarding the new Consumer credit directive organised; training materials prepared.
-    consumer education materials in order to raise consumer awareness of their rights and
responsibilities in the area of consumer credit regarding the new Consumer credit directive prepared;
material for the booklet about consumer rights in the field of consumer credit prepared.
-    1 five days‟ study visit for 5 representatives of the State Consumer Rights Protection Authority
organised.

3. Experts profile

Project Leader will guide the project team and co-ordinate and supervise the implementation of the
project, ensuring the proper implementation of the project components. She/he will establish and maintain
the links with beneficiaries and all stakeholders involved in the implementation of the project. She/he will
ensure the timely and effective implementation of the project in accordance with the Project Fiche and the
time schedule identified in the inception report. She/he will take on a shared responsibility for the
implementation of the specific activities defined in paragraph 2.3.

Profile

The Project Leader will have the following profile:
   - University degree in a relevant discipline (economist-lawyer would be an advantage);
   - Administration experience and good organizational skills;
   - Fluency in English;
   - Have minimum 10 years of working experience, preferably gained in a state institution/ state
       owned company of a Member State, in the area of financial/banking development;
   - Familiar with the relevant European Council Directives and Commission Regulations pertaining
       to the financial/banking services;
   - Experience in management functioning of financial/banking service providers.

Short-term Experts:

The Contractor may provide short-term experts who have particular experience in certain fields to
complement the skills and experience of the Project Leader. If the Contractor does not consider this
appropriate, the inputs of the other experts may be increased accordingly. The pool of experts will have to
consist of experts with the university degree and familiar with the relevant European Council Directives
and Commission Regulations, in particular:

Legal Expert
   - have the University degree in the field relevant to the objective of the project (preferably degree in
       law);
   - have minimum 5 years of working experience in the area of EU law (preferably law of
       finance/banking);
   - have good knowledge of the consumer protection acquis (all regulations and requirements in the
       field of consumer protection and financial/banking services);
   - practical experience in legal field (including development of operational guidelines).
                                                                                                          9
Economic Expert
   - have the University degree in the field relevant to the objective of the project (preferably degree in
     economics);
   - have minimum 5 years of working experience in the area of financial/banking services (preferably
     consumer credit);
   - have good knowledge of the consumer Protection acquis (all regulations and requirements in the
     field of consumer credit);
   - practical experience in projects administration, organizing training seminars and preparation of
     training material (including development of operational guidelines).

Expert of consumer rights protection
   - have the University degree in the field relevant to the objective of the project (preferably degree in
       law);
   - have minimum 5 years of working experience in the area of consumer rights protection;
   - have good knowledge of the consumer protection acquis;
   - practical experience in organizing training seminars and preparation of training material
       (including development of operational guidelines).

4. Location and duration

The project will commence in September, 2008 and will end in February, 2009. The project duration will
be of 6 months.
                                               Input, Sep     Oct    Nov Dec Jan           Feb
No.       Activities                           man
                                               days
           To administer and manage the 10
           project, organize the study visit
           To investigate the consumer 25
           credit market in Lithuania and
           find out about new credit
           products appeared in the market
           following the best practice of
           Member States.
           To review the national legislation 25
           in the field of consumer credit
           and      make      analysis    and
           recommendations for necessary
           amendments of those provisions
           in comparison with the best EU
           practice in the field of consumer
           credit in order to prepare for the
           implementation of the new
           Consumer credit directive.
           Review      and     analyze     the 30
           information system of the
           consumer creditworthiness in
           Lithuania in the field of
           consumer credit and to prepare
           analysis and recommendations
           for necessary amendments for the
           system model of consumer
           creditworthiness in comparison
                                                                                                   10
           with the best EU practice in order
           to prepare for the implementation
           of the new Consumer credit
           directive..
          Organize 2 seminars for the new 15
          employees of the State Consumer
          Rights Protection Authority and 2
          seminars for the providers of
          financial services and NGOs (100
          persons) in the field of consumer
          credit     regarding    the    new
          Consumer        credit    directive;
          prepare training materials.
          Prepare      consumer     education 20
          materials in order to raise
          consumer awareness of their
          rights and responsibilities in the
          area of consumer credit regarding
          the     new     Consumer      credit
          directive, etc.; material for the
          booklet about consumer rights in
          the field of consumer credit.
          TOTAL                                120

The project will be carried out in State Consumer Rights Protection Authority (Vilnius, Lithuania). To
ensure its smooth operation the experts will be provided with the office accommodation and necessary
office equipment.

5. Reporting and monitoring

The Twinning Light Project is subject to the same monitoring procedures as the standard Twinning. The
Inception report and a Final Report will be prepared and submitted as provided in the Twinning Manual.

The Inception report covering the first two months of the contract should be submitted during the third
month. The EU experts will prepare the detailed information about their findings respectively reviewing
during the inception phase with the complex work plan for the project.

Final report will be prepared, co-signed and submitted to the CPMA. The final report will be forwarded
no later than three months after the implementation period. The final report will summarize and evaluate
the outcomes, experience and problems encountered, and draft recommendations for the future
developments.

All reports must be written in the standard (EU-PHARE) format in English. The report will include the
results of the project, comparing those with the original objectives and estimate the success of the project.
It will also highlight any lessons learnt.

All these reports will be submitted to the CPMA.

For the coordination and monitoring of the project a Project Steering Committee will be established
comprising of the representatives from the following institutions:

The State Consumer Rights Protection Authority
Association of Lithuanian Banks
                                                                                                          11
Consumer Education Centre
European Consumer Centre
Financial Services Consumers‟ Association
CPMA and the Ministry of Finance representatives will attend as observers.

The Project Steering Committee will meet once in two months. Frequency of meetings may be altered if
necessary.
Project Language –English.

6. Total budget of the project

The maximum total budget for the project available is 180 000 EUR, of which approximately:
8000 EUR should be allocated to cover interpreting and translation costs;
6250 EUR – for study visit costs;
2000 EUR – for audit costs;
4500 EUR – for contingency costs.




                                                                                                 12
LOGFRAME PLANNING MATRIX FOR
Project: Strengthening Consumer Protection in the Area of Financial Services
                                                                                                                          Contracting period expires:      Contract execution period
                                                                                                                          15/12/2008                       expires:
                                                                                                                                                           15/12/2009
                                                                                                                          Total Budget: 0,18 MEUR          Transition Facility Budget:
                                                                                                                                                           0,18 MEUR
Overall Objective                                                            Objectively Verifiable Indicators:           Source of Verification
   To strengthen consumer rights protection in the area of consumer          o Consolidated approach in the area of          o EU             Commission
   credit and to increase consumer awareness of consumer credits.               consumer credit market established and            reports      on      the
                                                                                improved consumer awareness of                    implementation of the
                                                                                consumer credit issues                            consumer          credit
                                                                                                                                  directives.
Specific objectives                                                          Objectively Verifiable Indicators:           Source of Verification           Assumptions
                                                                             o investigation of consumer credit market       o EU             Commission o Full cooperation between
o investigation of consumer credit market in Lithuania and analysis of
                                                                                                                                  reports;                    the beneficiary, partners
  provisions that regulate consumer credit products following the best
                                                                                                                             o Reports          describing    and other related bodies in
  practice of the Member States.
                                                                                                                                  project progress;           the area of financial
o development of disputes resolution and infliction procedure in             o   draft recommendations for necessary                                          services.
  Lithuania according to the best practice of the EU Member States.              amendments in the area of disputes
                                                                                 resolution and infliction procedure in
                                                                                 the field of consumer credit.
o drafting recommendations on development of consumer credit
  database system in Lithuania in order to get and provide information       o   draft recommendations for composed
  about creditworthiness of consumers in the EU.                                 information system model of consumer
                                                                                 credit database system in order to get
                                                                                 information about creditworthiness of
                                                                                 consumers.
o training of the staff of the State Consumer Rights Protection              o  100 employees of the State Consumer
  Authority, consumers, credit providers and NGOs in the field of               Rights Protection Authority and 100
  consumer credit and preparation of education material.                        persons from the consumer credit
                                                                                providers and NGOs trained.
Results                                                                      Objectively Verifiable Indicators          Source of Verification             Assumptions.
  o research of the Lithuanian consumer credit market and new credit         o investigation of consumer credit market o State      Consumer      Rights   Full cooperation between the
      products appeared in the market in recent years following the best                                                   Protection Authority annual     beneficiary, partners and other
      practice of the Member States performed;                                                                             reports;                        related bodies in the area of
  o analysis and recommendations for the necessary amendments for            o recommendations         for    necessary o Manuals       and     training   financial services
      the provisions of consumer credit in comparison with the EU best          amendments in the area of disputes         programs;
      practice in the field of consumer credit in order to prepare for the      resolution and infliction procedure in           project      progress
      implementation of the new Consumer credit directive prepared;             the field of consumer credit;                       reports,

                                                                                                                                                                                      13
                                                                                                                           website of State
                                                                                                                            Consumer Rights
o   review and analysis of the information system on consumer                                                               Protection
    creditworthiness in Lithuania; to make analysis and                    o    proposals and recommendations in the        Authority
    recommendations for the necessary amendments for the system                field of consumer credit database
    model of consumer creditworthiness in comparison with the EU               system.
    best practice in order to prepare for the implementation of the new
    Consumer credit directive made;
o   2 seminars for employees of the State Consumer Rights Protection
    Authority (100 persons) and 2 seminars for the providers of            o   100 employees of the State Consumer
    financial services and NGOs (100 persons) in the field of consumer         Rights Protection Authority and 100
    credit regarding the new Consumer credit directive organised;              persons from the consumer credit
    training materials prepared.                                               providers and NGOs trained (4
                                                                               seminars).
o   consumer education materials in order to raise consumer awareness
    of their rights and responsibilities in the area of consumer credit    o material    for the booklet about
    regarding the new Consumer credit directive prepared; material for         consumer rights in the field of
    the booklet about consumer rights in the field of consumer credit          consumer credit.
    prepared.

o   1 five days‟ study visit for 5 representatives of the State Consumer
    Rights Protection Authority organised.                                 o   1 study visit for 5 persons organized.




                                                                                                                                               14
Activities                                                                   Means                                        Source of Verification   Assumptions
o to investigate the consumer credit market in Lithuania and find out        1 Twinning Light arrangement for 4 short-        o Project reports    o Full cooperation between
   about new credit products which appeared in the market following the      term experts for 120 w. d. of training and                               the beneficiary, partners
   best practice of the Member States.                                       advice.                                                                  and other related bodies in
o to review the national legislation in the field of consumer credit and                                                                              the area of financial
   make analysis and recommendations for necessary amendments of                                                                                      services
   those provisions in comparison with EU best practice in the field of
   consumer credit in order to prepare for the implementation of the new
   Consumer credit directive;
o to review and analyze the information system of the consumer
   creditworthiness in Lithuania in the field of consumer credit and to
   make analysis and recommendations for necessary amendments for
   the system model of consumer creditworthiness in comparison with
   EU best practice in order to prepare for the implementation of the new
   Consumer credit directive.
o to organize 2 seminars for the new employees of the State Consumer
   Rights Protection Authority (100 persons) and 2 seminars for the
   providers of financial services (100 persons) in the field of consumer
   credit regarding the new Consumer credit directive; prepare training
   materials.
o to prepare consumer educational material in order to raise consumer
   awareness of their rights and responsibilities in the area of consumer
   credit regarding the new Consumer credit directive, etc. - booklet
   about consumer rights in the field of consumer credit.
o to organize 1 five days‟ study visit for 5 representatives of the State
   Consumer Rights Protection Authority. The purpose of the study visit
   is to strengthen administrative capacity and to share the best practice
   in the area of consumer credit.

                                                                                                                                                   Smooth process of project
                                                                                                                                                   approving and implementation
                                                                                                                                                   procedures.




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