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With a new set of rules on Sunday, the CBN took a bold step to protect customers of financial institutions from what it called unfair treatment of consumers, in order to enhance confidence in the financial services industry, and promote financial stability, growth and innovation.
The Regulations provide minimum standards required of Institutions under the regulatory purview of the apex bank on fair treatment of consumers, disclosure and transparency, business conduct, complaints handling and redress in order to protect the rights of consumers and to hold the institutions accountable.
The CBN for instance mandated financial institutions to treat consumers equitably without bias at all stages of the relationship; and give consumers who meet the minimum legal and non – discriminatory eligibility requirements, equal access to basic services without regard to their social status, physical ability, marital status, gender, age, religion, tribe or ideology.
The CBN also mandated the institutions to consider the needs of the financially excluded, including the vulnerable groups such as low-income consumers, women, seniors, physically challenged and the non-literate in the development and implementation of their business models, strategies and processes.
The apex bank also insisted that it is the duty of Institutions to treat consumers equitably always and with courtesy and respect, urging them not engage in practices such as threats, intimidation, use of abusive or offensive language, humiliation, misrepresentation, deception or unfair inducements.
Also the CBN warned that Contracts between Institutions and consumers should not contain unfair terms – meaning an imbalance in rights and obligations which are detrimental to the consumer.
It also urged the financial institutions to promote transparency and enhance disclosure practices, among other set of rules.
To ensure compliance, the CBN announced sanctions for violation of guidelines by institutions, including ; a penalty of N500,000 which will apply per complaint per week shall apply while the infraction subsists for Non-resolution of complaints within prescribed timelines.
Also, Non-acknowledgment of complaints from customer or non-issuance of tracking numbers will attract N2m per complaint while Non-response to request or failure to comply with CBN directive will also attract a penalty of N2m.
For False or non-rendition of Returns/Reports, the CBN announced a N100,000 penalty and in addition, N10,000 for each day the infraction continues.
It said for Persistent breach of regulations, there would be Administrative sanctions on responsible officer(s), including issuance of warning letters and any other statutory sanctions on the officer(s) or Institution.
“These may be in addition to the sanctions prescribed in this Section of the Regulation.”
“Failure to comply with other provisions of the Regulations not specified above shall attract sanctions provided in the CBN Act, the BOFIA, other enabling laws and regulations.”
It further urged the Institutions to, not later than three months after the issuance of the Regulations, develop a policy approved by the Board of Directors that documents the processes, procedures and systems designed to ensure compliance with the provisions of the Regulations.
It said the objectives of the Regulations are specifically to protect consumers from unfair and exploitative practices by Institutions in their dealings with the consumers; unethical and predatory practices that undermine consumer confidence in the use of financial products and services; as well as the provision of inadequate and misleading information and/or failure to disclose material information.
The. BN further said the new regulation is also access to complaint redress mechanisms that are free, fair, timely, transparent, accessible and independent and also encourage transparency of Institutions in their dealings with consumers.
