The Consumer Protection Desk (CPD) of the Central Bank of Nigeria (CBN), under the leadership of Mr. Yahaya Ibrahim who is the Acting Director is facing mounting criticism over its inability to enforce regulatory compliance within Nigerian banks. As trust in the department deteriorates, banks are increasingly ignoring the guidelines designed to protect consumers, raising concerns about the effectiveness of the apex bank oversight.
Mr. Olayemi Cardoso the Governor has been urged to address the escalating situation, where several banks have shown blatant disregard for consumer protection standards. Despite the CBN's robust regulatory framework aimed at promoting fair treatment and safeguarding consumer interests, these banks have continued to flout the guidelines, with the attendant erosion of public trust in the CBN’s ability to protect consumers. According to reports from www.mp3dailynews.com.ng, several alarming trends have emerged:
Key Regulatory Violations by Banks
Failure to Resolve Complaints Within Set Timelines
Banks are routinely exceeding the CBN's prescribed timelines for addressing customer complaints, leaving consumers frustrated and disillusioned. Issues remain unresolved for months, directly contravening CBN guidelines. Under Yahaya Ibrahim’s tenure, the CPD has become lax, allowing banks to delay responses to customer grievances, especially in areas such as ATM failures, electronic transactions, excessive charges, and service disruptions.
Assistant Director in the Consumer Protection
Lack of Transparency in Transaction Fees
Many banks impose hidden fees and arbitrary charges, violating clear directives on transparency. Customers frequently encounter unexplained deductions, and the CPD’s failure to intervene has exacerbated the situation. Consumers report that complaints about these fees are often ignored by the CPD, pushing many to shift to cash-based transactions to avoid unexpected charges.
Misleading Disclosures and Practices
Some banks fail to adequately inform consumers about the terms and conditions of their products, leading to exploitation. Misleading advertising and unclear agreements have become common, with consumers entering into contracts without fully understanding the associated risks. In many cases, complaints regarding these practices go unnoticed by the CPD, raising suspicions that the department is shielding banks rather than protecting customers.
Unilateral Changes to Agreements
Banks have increasingly been altering agreements without customer consent or prior notice, undermining trust in the banking system. Despite numerous complaints, these practices have gone unpunished, taking advantage of the weak enforcement within the CPD under Mr. Ibrahim’s leadership.
Erosion of Trust in the Consumer Protection Desk
Once a beacon of hope for Nigerian bank customers, the CBN’s Consumer Protection Desk (CPD) has now become a source of frustration, with its credibility under intense scrutiny. Assistant Director Mr. Abubakar Gambo Zanna has come under fire, facing allegations of enabling and indirectly facilitating misconduct within the banking industry. Key concerns include:
Inadequate Enforcement of Sanctions
While the CBN has established guidelines to penalize banks that violate consumer protection laws, there has been a notable lack of enforcement. Banks, emboldened by the CPD’s inaction, continue to flout regulations, confident that any consequences will be minimal.
Delayed or Nonexistent Responses to Complaints
Consumers report long delays or complete silence from the CPD when they escalate unresolved complaints. This has fostered a perception that the CBN is either unwilling or unable to tackle the banks’ infractions, further eroding consumer confidence.
Perception of Favouritism
There is a growing belief that some banks are receiving preferential treatment from the CPD, which has compromised the department’s impartiality. This perception has heightened consumer distrust, as many feel that regulatory oversight is skewed in favor of powerful financial institutions.
Consequences of Inaction
The cumulative effect of these violations by banks, coupled with the CPD’s perceived ineffectiveness, has led to a sharp decline in consumer trust. Many customers have resorted to seeking redress through external means, such as legal action or social media campaigns, weakening the CBN’s authority in matters of consumer protection. If left unaddressed, this erosion of trust could have long-term consequences for Nigeria’s financial stability, as consumers grow increasingly dissatisfied with the banking sector.
The Nigerian banking system’s integrity depends on consumer confidence and the belief that regulatory bodies like the CBN will act decisively to safeguard customer interests. The growing disregard for regulations by banks, combined with the weakening of the CPD under Deputy Director Mr. Zanna, threatens to undermine this trust. Immediate and decisive action is needed to restore public confidence in the consumer protection framework and ensure that banks are held accountable for their misconduct.
We call on the CBN to take urgent steps to address these concerns, protect consumers, and preserve the integrity of Nigeria’s financial system. Only through strong leadership and accountability can the CBN rebuild trust and ensure that Nigerian banks uphold the standards of fair and transparent banking practices.