News & Events

FEB 2024 NEWS Aluko & Oyebode

Consumer protection refers to measures taken to safeguard the interests of buyers and customers against harmful, degrading, and/or harsh market practices. It also refers to measures that enable consumers make well-informed decisions about their choices and have access to effective redress mechanisms. 

The Federal Competition and Consumer Protection Commission (“FCCPC”) is the regulator primarily responsible for consumer protection in Nigeria. In addition to the FCCPC, sectoral regulators also regulate consumer protection within their regulated industries. Thus, Fintechs should conduct a regulatory analysis to determine regulations and regulators that may impose consumer protection compliance requirements.  

Consumer Protection for Fintechs: Central Bank of Nigeria Consumer Protection Framework 2016  

 The Central Bank of Nigeria (CBN) is the primary regulator of the financial services industry in Nigeria. The CBN released the Central Bank of Nigeria Consumer Protection Framework 2016 (the “Framework”) to guide the effective regulation of consumer protection practices of financial institutions and ensure consumers of financial services are adequately protected and treated fairly.  

The Framework contains nine (9) key consumer protection principles (the “Principles”):   

  • Legal, regulatory, and supervisory structures 
  • Responsible business conduct 
  • Disclosure and transparency 
  • Fair treatment 
  • Protection of consumer assets and privacy 
  • Complaints handling and redress 
  • Competition 

 

Consumer Protection for Fintechs: Central Bank of Nigeria Consumer Protection Regulations 2019 

The Central Bank of Nigeria (CBN) issued the Central Bank of Nigeria Consumer Protection Regulations 2019 (the “Regulation”) to give effect to the Principles contained in the Consumer Protection Framework. The Regulation applies to all institutions under the regulatory purview of the CBN. 

 

Under the Regulation, financial institutions including Fintechs, are required to develop a policy that documents the processes, procedures, and systems designed to ensure compliance with consumer protection. Fintechs are also required to ensure that contracts with consumers do not contain unfair terms, such as eliminating or limiting the liability of a Fintech to loss caused to a consumer by misrepresentation, negligence, or misleading information on its products or services. 

The Central Bank of Nigeria Consumer Protection Regulations 2019 (the “Regulation”) which gives effect to the principles contained in the Consumer Protection Framework 2016 also requires financial institutions, including Fintechs, to treat consumers with equity, courtesy, and respect and not engage in unethical practices such as threats, humiliation, misrepresentation, deception, or unfair inducements when engaging with consumers. In addition, in ensuring consumer protection, Fintechs are expected to act in a manner that is ethical and consistent with the terms and conditions of their contracts with their consumers.