Consumer Protection

Consumers are an important stakeholder in the financial market. In fact, they are the reason for the existence of markets and, thus, they sustain markets. It is imperative that the legal framework provides for appropriate legal arrangements to safeguard the interest of consumers. Consumer protection in the financial system involves the protection of personal and credit information data; the right to security and safety in electronic and e-commerce transactions; the availability, access, and inexpensive cost of services such as remittances and the opening and maintaining of accounts; and an appropriate mecha­nism to address grievances in the event of a dispute with a bank. Often, cost-effective
and efficient out-of-court dispute settlement arrangements serve a useful purpose in the protection of consumer rights.

Also, banks need to have sound systems in place to ensure that financial data, espe­cially credit information, is secure, is accurate, and is released to relevant parties in accor­dance with prescribed legal safeguards that are permitted under the law or as agreed to by the customer. The customer has a legal right to require the systems used for electronic transactions, including ATMs and wire transfer systems, to be secure and to not expose the customer to unnecessary risk and loss. In this regard, a fair fees structure and availabil­ity of basic services is essential for access to finance by the poor. The consumer protection legislation should also provide for full and adequate disclosure of prices and of retail sale terms and conditions. In addition, an appropriate disclosure regime for financial institu­tions is a key ingredient of a comprehensive consumer protection regime.

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