The Central Bank of Nigeria (CBN) has released revised Consumer Protection Regulations aimed at implementing consumer protection principles for institutions licensed or regulated by the CBN. The updated regulations reflect current consumer protection practices and aim to ensure improved consumer outcomes and access to financial services.
Key provisions of the revised regulations include requirements for Financial Services Providers (FSPs) to ensure that their advertising and promotional materials comply with minimum standards. FSPs are prohibited from referencing unaudited financial statements in their sales promotions and must ensure that advertisements do not overly emphasize benefits while downplaying associated risks. Additionally, unsolicited advertisements must be provided to consumers at no cost.
To ensure transparent and fair debt recovery processes, regulated entities must engage customers and provide notices of outstanding obligations before commencing debt collection. Foreclosures should only be initiated when other recovery options have been exhausted, and customers must be given the option of a private sale before foreclosure, except where waived by the customer. Proceeds from foreclosures must be immediately applied to the loan account, and customers should be informed of the balance. Banks are also required to provide customers with a report of the sale of collateral.
Furthermore, banks are liable for the actions of their agents engaged in debt collection and are prohibited from contacting individuals other than the customer for information unless authorized. FSPs are also required to protect customers’ assets against fraud or misuse and be liable for losses arising from breaches of required controls.
The regulations also address consumer data protection, requiring banks to protect the privacy and confidentiality of consumer information and assets against unauthorized access. FSPs must obtain written consent from consumers to collect and process their personal data and provide options to withdraw consent at any time. Personal data should not be shared with third parties without express consent, and clear “Opt-in” and “Opt-Out” options for data sharing must be provided.
The CBN emphasized that the revised regulations aim to promote a safe, trustworthy, and consumer-friendly financial services environment by promoting transparency, disclosure, and protection from unethical practices. They reflect the changing landscape of the financial services industry and aim to address new challenges and risks faced by consumers while enhancing their choices, convenience, and accessibility.