Written by Admin
The Business Times: Friday, 24 December 2010 06:23
CONSUMERS in the financial sector can only get their own voice and protection against abuse from product-and-service providers in the sector if the Government will suitably amend the Bank of Tanzania Act 2003, which established the central bank (BoT), the Tanzania Consumer Advocacy Society Society (TCAS) has observed.
Speaking to Business Times through wire communication this week, the Society's executive director, Bernard Kihiyo, said there is a real need to amend the Act. This is with a view to making clear the rights and responsibilities of banks – and also the rights and responsibilities of consumers of financial products and services.
"This means that every person should get his right, and whenever a problem arises we would be able to monitor where and who is responsible," Kihiyo said.
Noting that “there are a number of cases of violation that are done by commercial banks against their customers, mainly in on-line banking,” Kihiyo said this was in large measure due to consumers signing contracts without having full knowledge of their implications.
Asked if a consumer can take legal action against a bank for violation of his rights, Kihiyo said "it depends on the line of violation; it may be something to do with transfer of money – may be money has been transacted without the customer's authority – or a violation which happens in the area of loans..."
Speaking on the matter, the chief executive officer of Twiga Bancorp, Hussein Mbululo, said “there is a need to look at this issue of violation of consumer rights because they are many (such violations). Consumer organizations overseas know about their rights, and they protect their people well. I do not know much about the BoT Act (2003); but, once I have gone through it. I will be able to point out the problems in it. ”
All that notwithstanding, Mbululo mentioned some of the challenges that consumers are faced with include unilateral and arbitrary changes in interest rates; high bank charges, service charges, funds transfer etc without prior knowledge or acquiescence of account holders!
James Guest is the president and CEO of Consumers Union of US Inc, the vice-president for Consumer Organizations in G-20 countries – and also Consumers International (CI). Speaking to Business Times on the issue, Guest said there is a need of commitment from the most powerful nations in the world to protect citizens from abusive financial services and other industry malpractices.
"The global nature of banking means that countries around the world are now facing the same challenges. It is common sense that they work together to develop solutions," he said.
In the event, CI urgently wants to see the establishment of an Experts Group on Consumer Financial Protection which would report to the G20 Summit in 2011.
This would be a first step to ensuring that consumers from both developed and developing nations have access to stable, fair and competitive financial services. Samuel Ochieng, the CEO for CIN-Kenya says "getting this right is not only vital to consumers, but also to the ongoing stability of the world economy."
In that regard, Ochieng says “Consumers International – which represents 220 consumer organisations in 115 countries – is urgently calling for the needs of everyday consumer of financial services to be pushed to the top of the agenda.”
Furthermore, “poor financial consumer protection – as exemplified by US sub-prime mortgages – was a key catalyst for the financial crisis... “The interconnected nature of global banking then spread the crisis rapidly from country to country, threatening livelihoods, savings and social stability.”
According to Ricardo Nasio, president of ProConsumer in Argentina, said people around the world will live with the consequences for years to come. "For many consumer organisations, the financial crisis highlighted what is an ongoing emergency in financial services. Consumers International members in large and small, rich and poor countries are dealing with complaints about financial products and services every day...
"And, each year, the global economy creates up to 150 million new consumers of financial services, many of whom are in countries where consumer protection and financial literacy are woefully inadequate," Nasio noted. “Last month, the G-20 finance ministers and central bank governors issued a statement detailing the progress they have made in finding “policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels,” Nick Stace, CEO for Choice of Australia, says.
“This is, of course, important; but, once again, there is barely a mention of the consumer – a crucial element that remains conspicuous by its absence from these international discussions.”