Over time, there has been many reforms in the banking sector like dilution of government stakes, deregulation etc that resulted in greater competition. Today banking has moved from class to mass and this has resulted in numerous problems. But more attention also needs to be given to consumer protection in regard with the banking sector.
Often times, Nigerian consumers in the banking sector do not even know they have rights, infact they wonder if anything like consumer rights exist.
- Right to fair treatment
This right prohibits banks from discriminating against customers on grounds of gender, age, religion, caste and physical ability while offering products and services. Banks can, however, continue to offer differential rates of interest or products to customers. “The financial services provider may, however, have certain special products which are specifically designed for members of a target market group or may use defensible, commercially acceptable economic rationale for discriminating between its customers.
- Right to transparency, fair and honest dealing
You can expect language in bank documents to be simplified and transparent. The charter requires banks to ensure that all contracts are transparent and easily understood by the common person. The onus of sending out effective communication will rest with banks. Information on the product’s price, customer’s responsibilities and key risks will have to be clearly disclosed. “Any features that may disadvantage the customer should be made known to him. Important terms and conditions should be clearly brought to the notice of the customer,” the charter says.
- Right to suitability
Despite several regulations, complaints related to mis-selling continue to plague the distribution space, particularly in case of life insurance policies. Lured by higher commissions, sales officials tend to push products without ascertaining their suitability for the customer. With this charter coming into force, such officials might find it difficult to palm off say market-linked insurance products to senior citizens who are looking for stable returns. The charter has now made it mandatory for banks to sell products after keeping in mind customers’ needs, financial circumstances and understanding.
- Right to privacyBanks are duty-bound to keep customers’ personal information confidential, unless the disclosure is required by law or customers have given their consent. “Customers have the right to protection from all kinds of communications, which infringe upon their privacy,” the charter states. Banks cannot pass on your details to telemarketing companies or for cross-selling. “There have been instances where bank officials, on the basis of transaction details, have asked customers to route their investments through them (since banks also act as distributors for mutual funds and insurance companies). This is unethical.
- Right to grievance redress and compensation
The right to grievance redress is at your aid if your bank fails to adhere to basic norms. The charter makes banks accountable for their own products as well as those of third parties like insurance companies and fund houses. They will no longer be able to wash their hands of the responsibility once the product is sold. Banks will have to communicate the policy for compensating for mistakes on their part, lapses in conduct and non-performance or delays. The redress and compensation policy will have to state the rights of customers when such events occur.
- Right to fair treatment