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The Bank of Zambia (BoZ) has directed financial service providers to ensure consumers fully understand the products they are signing up for, saying customer protection went beyond simply presenting contracts for signature.
BoZ Assistant Director for Consumer Protection and Market Conduct, Banji Milambo, said consumers were entitled to clear, accurate and timely information on financial products, including loan terms and conditions, before making financial commitments.
Speaking on the Bank of Zambia Online podcast on Wednesday, Milambo said regulated financial institutions had a responsibility to explain the benefits, obligations and risks associated with their products to enable customers to make informed decisions.
“Helping consumers understand the benefits, obligations and risks associated with financial products was key to promoting informed decision-making and protecting consumer rights,” he said.
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Milambo said consumers also had the right to be treated fairly and with respect, have their personal information kept confidential and receive services in line with the terms and conditions advertised by financial institutions.
On bank charges and other fees, Milambo said financial service providers were prohibited from changing prices without first obtaining approval from the Bank of Zambia and notifying their customers.
“It is imperative, it is required, it is a legal requirement that whenever a financial service provider seeks to amend charges or change prices, they must, first of all, get authorization from the Bank of Zambia,” he said.
He advised members of the public to confirm that a financial service provider was licensed by the central bank before using its services, warning that the BoZ had no legal mandate to intervene in disputes involving unlicensed entities.
Milambo said consumers could verify a provider’s licensing status by checking for its licence at its business premises or consulting the list of licensed financial service and payment system providers published on the Bank of Zambia website.
He added that while licensing did not eliminate the risk of misconduct, it enabled the central bank to investigate complaints and take enforcement action against regulated institutions found engaging in fraud, scams or other unlawful.
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