Governor Ernest Addison Must Prioritize Consumer ProtectionMay 23, 2020
Financial consumers in Ghana have in the recent past suffered distasteful treatment at the hands of financial service providers. This has happened because there is gross disregard for financial consumer protection in Ghana. Without mincing words, this unsatisfactory state of affairs can be pinned firmly at the doorstep of the Bank of Ghana, which is currently under the leadership of Dr. Ernest Addison.
Over the years, some financial institutions in Ghana have egregiously exploited consumers by suffocating them with unconscionable loan terms, given consumers misleading information about product pricing, and failed to disclose critical information about risks associated with products offered to consumers, among others. Furthermore, several thousands of depositors have lost their entire life savings as result of unlicensed financial institutions being allowed to freely operate.
In a well functioning financial system that prioritizes consumer protection, the situations described above will not be allowed to happen or allowed to go unpunished.
Since assuming office in April 2017, Governor Ernest Addison cannot be credited with any deliberate policy intervention aimed at proactively advancing the interests of financial consumers. This is in spite of the fact that, Section 3(2)(d) of the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) places an obligation on the Bank of Ghana to “develop appropriate consumer protection measures to ensure that the interests of clients of the banks and the specialised deposittaking institutions are adequately protected”.
Sadly, not even the coronavirus pandemic that has brought widespread difficulties has succeeded in getting the Bank of Ghana to place consumer protection on the front burner.
While regulators and government agencies in other jurisdictions are actively leading the charge to ensure financial consumers are offered critically needed reliefs to help them navigate the coronavirus pandemic, authorities in Ghana have adopted a passive and disinterested approach.
In Egypt, the Central Bank of Egypt (CBE) has instructed banks to cancel ATM withdrawal fees and points of sale (POS) fees and commissions for six months. In addition, the CBE has instructed banks to give 6 months repayment holiday to individuals and businesses impacted by COVID-19. The CBE has also instructed the suspension of late fees (penalty interest). Furthermore, in an effort to reduce cash handling, all bank transfers within Egypt have been exempted from fees and charges.
In the United Kingdom, the Financial Conduct Authority (FCA) has confirmed “a package of targeted temporary measures to help people with some of the most commonly used consumer credit products”. The FCA says: “we know many people are suffering financial pressures brought on as a result of the coronavirus pandemic. The measures we’ve announced are designed to provide people affected with short-term financial support through what could be a very…