The Central Bank of Nigeria (CBN) has directed banks and Other Financial Institutions (OFIs) to submit comprehensive plans for consumer protection, education and enlightenment on or before March 31, 2020.
The Director, Consumer Protection Department, CBN, Mr. Kofo Alada in a signed document posted on the apex bank official website said, “Consequently, all regulated institutions are required to immediately develop internal policies to comply with the regulations and ensure approval by their respective Board of Directors.
“They shall therefore forward the approved policies, which shall include comprehensive plans for consumer protection, education and enlightenment to the Director, Consumer Protection Department, CBN on or before March 31, 2020.”
According to him, the CBN issued the Consumer Protection Framework (CPF) in November 7, 2016 to enhance consumer confidence in the financial services industry and promote financially stability, growth and innovation.
“Further to the above, the CBN hereby issues the Consumer Protection Regulations to improve overall compliance with the CPF by banks, other financial and non-bank financial institutions (regulated institutions).
“The regulations prescribe far-reaching requirements on Fair Treatment of Consumers’; Disclosure and Transparency; Responsible Business Conduct; and Complaints Handling and Redress, in line with principles enunciated in the CPF.”
However, the guideline on Consumer Protection Regulations that was released during the weekend stated that its objectives are to protect consumers from unfair and exploitative practices by Institutions in their dealings with the consumer and protect bank’s customer from unethical and predatory practices that undermine consumer confidence in the use of financial products and services.
Other objectives include protect customer against the provision of inadequate and misleading information and/or failure to disclose material information; by ensuring access to complaint redress mechanisms that are free, fair, timely, transparent, accessible and independent; and by encouraging transparency of Institutions in their dealings with consumers.
On data protection and privacy, the CBN’s guideline said, “To ensure data protection and privacy of consumers, Institutions shall:Protect the privacy and confidentiality of consumer information and assets against unauthorized access, and be accountable for acts or omissions in respect thereof.
“Obtain the written consent of consumers to collect and process their personal data for specific purpose and provide them with the option to withdraw the consent at any time,” the guideline explained on data protection and privacy.
The CBN’s guidelines noted that penalties for violation by Institutions shall be applied as provided non-resolution of complaints within prescribed timelines with a penalty of N500,000.00 per complaint per week while the infraction subsists.
Other penalties include, Non-acknowledgment of complaints from customer or non-issuance of tracking numbers that carries a fine of N2,000,000.00 per complaint; Non-response to request or failure to comply with CBN directive – A penalty of N2,000,000.00.
“False or non-rendition of Returns/Reports – N100,000.00, and in addition, N10,000 for each day the infraction continues; Persistent breach of regulations – 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 and 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,” the guideline explained.
On compliance, the guideline stated that, “ Institutions shall, 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.”