1,439 depositors reported banks to CBN
Depositors unresolved complaint amount to over N20.5b
Money disputes between banks and their customers are never reported, latest records have revealed that between January and June this year, 1,439 displeased depositors reported their banks to the Central Bank of Nigeria over illegal charges and unresolved complaints regarding total claims of N20.5bn, $163,479, £2,889.98 and €32.82, NIKE POPOOLA reports
For many years, a lot of bank customers have been losing parts of their deposits to their banks for faults that are not usually theirs.
It has been discovered that often times when depositors complained to their banks, their grievances were seldom addressed.
According to many customers, when they approached the banks, they were usually asked to fill forms, but they never got any response.
When the customers felt that they did not have what it takes to fight their banks, they gave up on their lost deposits.
But records have revealed that some displeased depositors who refused to be cheated and were ready for a showdown with their banks, actually got their monies back.
For instance, a displeased bank customer, Kemi Ibrahim, said a transfer of N250,000 that she made was not successful, but the money was not reversed.
“After three months of going to my bank and it was not resolved, someone told me he had read in the papers that I could report to the CBN. I went to the CBN office and I was put through on how to lodge my complaint. That was how I got my money back with CBN’s intervention.”
The Subcommittee on Ethics and Professionalism of the Bankers’ Committee also complements the CBN’s efforts in complaints and dispute resolution.
However, the subcommittee does not interfere in cases already being handled by the CBN or currently in court.
The Registrar, Chartered Institute of Bankers of Nigeria, Seye Awojobi, said the subcommittee had resolved more than 2,500 complaints of depositors brought before the subcommittee in the past 18 years.
Awojobi, who is also the secretary of the subcommittee, said it had helped depositors get back their monies in both local and foreign currencies.
According to him, the subcommittee always expects the complainants to first lodge their complaints with their banks, and if not resolved or still dissatisfied, they could then approach it.
The registrar said the CBN, the Nigeria Deposit Insurance Corporation and the Bankers Committee’s members are represented in the subcommittee.
“We have 90 days maximum to resolve complaints from the day you give us your petition, except where the cases require further investigation,” he said.
While only a few go the extra mile to report, many customers have actually not been able to pursue their case to a logical end.
A bank customer, Tomori Bolaji, reported to newsmen, saying, “Almost a year ago, I had an unsuccessful transaction through Internet banking and till now, my money has yet to be refunded. I filled many forms but all did not yield any result. I went to the receiving institution, but there is still no refund.”
Bolaji is worried that his bank is not even communicating with him to let him know what has happened to the money.
Another bank customer, Ayo Bamidele, said, “I withdrew N5,000 from an Automated Teller Machine and my account was debited but the money did not drop from the machine. I went to my bank on many occasions to complain but it did not resolve my matter.
“I got tired of going to complain because the stress I was going through in order to get the N5,000 was too much. So, I stopped using that bank because the treatment that was meted out to me was very annoying.”
Apart from the burden of high interest rates suffered by borrowers of bank loans, some of the most common complaints from depositors include illegal charges, failed e-transactions, dishonoured guarantees, bad customer service and lost deposits.
A depositor, James Nnamdi, said, “I had to stop recharging my phone through my mobile banking app because most times, my money is deducted and my phone is never credited.
“Even recently, I tried buying a N1,000 recharge card twice. They deducted the money twice and did not reverse the payment. Before, I used to complain to my bank, but most times I don’t have the time to go and complain. If I call the customer care line most times, the issue is never resolved.”
Sanctions
The CBN, in September 2018, released a circular on the regulation on instant interbank electronic funds transfer services in Nigeria, which was signed by its Director, Banking and Payments System Department, Dipo Fatokun, and issued to all Deposit Money Banks, microfinance banks, other financial institutions, mobile money operators, development finance institutions, payment service providers and other stakeholders.
In the circular, the apex bank introduced N10,000 fine for any failed Nigerian Instant Payment transaction not reversed into the customer’s account within 24 hours, if the sender or beneficiary complained.
It also stated that the delayed application of inward NIP into beneficiaries’ accounts beyond four minutes would attract a penalty fee of N10,000 per item.
According to the apex bank, an electronic funds transfer or an NIP happens between two distinct entities when delivery from the sending entity to the receiving entity takes place within one minute (60 seconds), while a payment system where delivery to the receiving entity occurs beyond one minute is considered to be an Automated Clearing House system.
Industry experts have commended this initiative, noting that problems, especially from failed transactions, had caused depositors a lot of pains.
For instance, a depositor from Ogun State, who simply identified himself as Mr Adewale, complained to newsmen, saying, “Someone credited my account but I did not receive any alert. After some days, I went to the bank to complain but I was told no transaction occurred. Meanwhile, the person’s account was debited. The sender went to complain and the cashier replied that the transfer was completed.”
Five months after Adewale complained, the bank had yet to sort out his problem as of the time of filing this report.
Though the fine introduced by the CBN is quite new, there is need for the depositors to be aware of their right under this new law, according to experts.
Hidden charges
Another practice by banks that many customers find nauseating is the lack of transparency when dealing with their customers, especially when dealing with loans.
According to a public relations practitioner in Lagos, Mr Tope Adaramola, banks don’t make their terms clear to their clients because at the point of collecting loans, they give an easy impression but they later start adding some hidden charges.
He said, “I have been a victim before when I collected a loan and calculated what I estimated as the projection, but along the line, they introduced some charges, which made my payment higher than it should be. This discouraged me from further borrowings.
“In a time when we are talking of financial inclusion and a great number of Nigerians are unbanked, it is very important for the banks to change their ways because they are not trusted.”
A customer, Benjamin Okotie, said that many customers usually had challenges paying bank loans because of undisclosed charges at the point of collection.
“I had to stop the collection of a loan when I asked questions and discovered that the charges they would be collecting on a loan of N18m I wanted to get was killing,” he said.
Complaints and refunds
When issues arise and customers lodge complaints, many banks are always quick to blame the customers and not ready to take responsibility for the issues.
For instance, on October 12, 2018, a bank customer, Taiye Kazeem, got a debit alert of N76,500 on his account and quickly went to the bank to enquire about what happened.
“I was asked to fill a form, which I did. When I got home, I got an SMS from my bank that my issue would be resolved on November 1.
“I felt three weeks was too long to wait for a solution; so the following day, I went back to my bank to ask why I must wait for three weeks to get a response. The bank said they had loads of complaints with them and I should wait till they would reach my turn.
“On October 30, 2018, I got another SMS from my bank saying, ‘Dear customer, we sincerely regret the delay in resolving your complaint. Our team is working’.
“Now, we are in December, I have been going to the bank but nothing has been done to my issue.”
While many displeased customers have continued their unending wait for the resolution of their complaints, records have revealed that the banks have actually been found guilty in many of the cases reported to the CBN by their customers.
Through the intervention of the regulator, many banks have been ordered to return huge sums to the customers.
For instance, the latest records obtained from the CBN revealed that the number of complaints it received from consumers of financial services rose to 1,439 in the first half of 2018 from 1,141 in the corresponding period of 2017.
The complaints were mainly in respect of excess charges, frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.
A total of 2,451 complaints, including those outstanding from 2017, were resolved in the review period, compared with 1,270 complaints resolved in the same period of 2017, according to the CBN.
The central bank said total claims in the review period in local and foreign currencies amounted to N20.5bn, $163,479, £2,889.98 and €32.82, compared with N14.72bn, $2.42m and €6,940 in the corresponding period of 2017.
The CBN stated that the sum of N6.80bn, $119,349, £2,889.98 and €32.82 were refunded by financial institutions to their customers, compared with the sum of N7.21bn, $2.40m and €6,940, refunded in the same period of 2017.
Compliance
While the CBN has continued to introduce measures to check the excesses of banks, records have revealed that the banks have continued to create unnecessary worries for their customers, especially in the aspect of deducting too many illegal charges from their deposits.
For instance, a depositor, Wura Ekundayo, complained, “When I do a transaction, my bank can deduct SMS charges up to five times on the same transaction. When you look at many customers they do this to, it amounts to a lot of money to the banks.”
As part of its supervisory roles, the CBN conducted compliance examination on 21 banks in the first half of 2018 to ascertain their level of compliance with consumer protection regulations.
The regulator was particular on the ‘Guide to Charges by Banks and Other Financial Institutions.’
From its findings, the banks’ compliance with the regulation on application of SMS charges was not impressive.
The CBN said the exercise revealed that compliance levels were different.
In the aspect of interest rate on executed offer letters, it was 95.3 per cent; directive issued after the last examination and other directives were 90.0 per cent; application of SMS charges was 52.4 per cent; and outstanding complaints were 22.6 per cent.
However, it added that there was 100 per cent compliance in the areas of outward telegraph/SWIFT and related charges of 0.5 per cent, current account maintenance fee charges on savings account and validation of refunds.
As part of effort to further improve market conduct, the regulator said it developed and exposed the guidelines on complaints management to stakeholders in the review period.
According to the CBN, comments and recommendations were being implemented, following which the guidelines would be finalised.
The Chief Executive Officer, Nigeria Council of Registered Insurance Brokers, Mr Fatai Adegbenro, observed that banks usually had hidden charges, which they didn’t explain to the customers when giving out loans.
The banks, he added, were also fond of sending numerous unsolicited SMS so that they could deduct the charges too.
Adegbenro said, “Even if you don’t have loans with them, they send many SMS in a day during anniversaries to greet you, slamming you with charges that amount to a huge sum.
“Even if you want to complain, you end up wasting your time and spending more than the charges; yet they will not resolve it.”
He observed that many customers hardly checked their bank statements but that even when they did, the process of getting refund was tedious and expensive.
“If a bank has up to 10 million customers and deducts N5 on an SMS up to five times in a day, they would have made about N250m. That is why you see them declaring billions of naira as profits every year,” he said.
Reporting your bank
With the right knowledge, a depositor would not give up on his situation by forfeiting his money over a problem that was not created by him.
But either out of ignorance or impatience to take a complaint to a higher authority, many customers have allowed banks to continue to grow their profits with their money, according to experts.
For instance, a depositor, Bola Efunnowo, said, “I received an alert from my bank on the night of April 20th to the effect that I allegedly made a PoS transaction to the tune of N62,890 with a popular Nigerian airline. I rushed to the bank the following morning to report the fraud.
“I was asked to fill a form and I did that immediately. But up till now, the bank has yet to resolve the problem.”
The Director, Corporate Communications, CBN, Mr Isaac Okorafor, said customers should not always be too much in a hurry to let some grievances go away, but should take a further step by reporting to the regulator.
“We have actually helped a lot of displeased depositors to get monies from their banks after they complained,” he said.
According to him, any depositor who feels extorted by his bank, if after complaining and the bank denies, should send an email to the CBN.
He said if customers fail to lodge their complaints, it would be impossible for the CBN to go into the banking hall and defend their rights.
“The depositors should lodge their complaints with us. So, please find time to report any wrongdoings by the banks,” he said.
While he noted that there were all sorts of complaints, Okorafor said convenient banking services required various levels of investments, which customers must pay for, but only at appropriate rates.
“Banking services are not free anywhere in the world,” he added.
He explained that if a person could sit in his comfort zone to make transactions, it was only made possible because some people invested in the banks.
“It is not government subsidy; some people are paying for it but what the CBN would not do is to allow your banks to rip you off,” he said.
He said the CBN had published on its website the appropriate ways to address bank problems.
The CBN said it had directed all banks to expand their existing ATM help desks to handle all types of consumer complaints.
According to the CBN, a displeased customer should first contact his bank to lodge his complaint at the bank/branch where the issue originated, and then allow two weeks (it might be less in some banks) for the issue to be resolved.
However, if the bank failed to address it, he has the right to escalate the complaint to the Consumer Protection Department of the CBN.
According to the CBN, a depositor can only direct complaints to the CPD upon the failure of his bank/financial institution to resolve his complaint within the two-week timeline given by the CBN.
A customer can write a letter or send an email to the CPD.
The customer should address the letter to the Director, Consumer Protection Department, Central Business District, Abuja, which can be submitted at the CBN head office or at any of the CBN’s branches nationwide.
The CBN deals with all financial-related complaints so far as they are against financial institutions within its regulatory purview.
To write an effective complaints letter, the complaint, according to the CBN, should be clear and concise to avoid ambiguity.
The complaint letter (petition) should contain, among other things, the name, address, contact phone number and email of the complainant; name of the financial institution; personal banking details (do not include PIN and passwords); history/date of the transaction in dispute; and amount claimed (if any).
The complainant should also attach relevant documents to support the claim and evidence to show that he/she had first lodged the complaint at his bank.
Financial inclusion
While there is much emphasis on financial inclusion, close to 40 per cent of adult Nigerians do not have access to financial services, according to the CBN.
But records have it that banks have continued to frustrate government’s efforts to bring more people into the financial system.
On different occasions, the Federal Government had released monies to banks to be disbursed to Small and Medium-scale Enterprises.
But the banking regulator and other observers have blamed the banks for denying the small borrowers access to the funds, but investing it to increase their profits.
The Central Bank Governor, Godwin Emefiele, said that microfinance banks in the country were charging outrageous interest rates, and many SMEs were unable to access the Federal Government’s loans aimed at stimulating local production and boosting non-oil export.
He said, “Those microfinance banks that we have today are not lending loans at single interest rates today; some of them are even lending money on flat. You borrow N50,000 for 90 days, and they expect you to pay another N50,000 interest to them in another 90 days. That is outrageous and that is too exorbitant.”
According to him, there are many funds targeted at smallholder farmers as well as those who are into small businesses in Nigeria.
“We have disbursed part of the money but we, even in the banking community, are not very happy that not all those funds have been disbursed so far,” he said.
According to him, more people need to access the funds and create jobs in the economy.
“Under the central bank, we have the commercial agricultural credit loans scheme; we have N200bn set aside for SMEs. Under the central bank and the Bankers’ Committee, we currently have close to N60bn available to fund agriculture and small businesses and yet these monies are lying and not been disbursed.”
He berated the lending institutions for not being supportive enough of the Federal Government’s efforts to make cheap loans accessible to those in need of them.
Emefiele said that the Federal Government had on several occasions made funds available to the lending institutions to be disbursed to SMEs at single-digit interest rates but the banks would either not lend out the funds or make such available at double-digit interest rates.
A former President, Association of National Accountants of Nigeria, Dr Samuel Nzekwe, said the banks were supposed to be in a position of trust, but that their actions were quite disturbing.
According to him, if depositors carefully go through their bank statements, they would see charges that they were not aware of and this is quite bad.
He said there was a need for the regulator to ensure that banks charge the right rates.
While noting that the DMBs hardly lent out money, he said, “Before they give you N500,000 loan, they would have first collected N50,000 before they start charging you interest on the loans.”
According to him, the purpose of the banks is to collect money and give to those who need it, but this money is not so accessible.
He said, “If they are doing the right thing, you will see that their profits will not be what they are now. It is the illegal charges that they are imposing on customers that are making their profits huge.
Nwekwe said, “The unresolved money complaints and illegal charges form part of the huge profits they declare because if you put money in the bank and they are taking it gradually, you will see that it is part of the profits they are declaring.
“But if we are talking of financial inclusion and we want to get people into the banking system, everything must be right. The banks have to be clean and transparent.”
Building trust
According to experts, consumer protection helps to increase trust and confidence in the financial system, and it is critical in improving financial inclusion, beneficial to individuals and the economy and helps protect consumers from probable market abuse and exploitation.
The Managing Director and Chief Executive, NDIC, Umaru Ibrahim, said it was critical for the operators and regulators to cooperate on ethics and professionalism in the banking industry.
He lamented that the abuse of extant regulations and ethical standards impacted negatively on the confidence in the banking industry and the financial system in general.
The Consumer Protection Council recently quoted President Muhammadu Buhari as saying, “We have caused organisations to modify their behaviour or confront their past wrongs, whether it was an inappropriate clinical trial in one corner of the country, or how a business plies its trade in products that result in injury, or in the capital market with how companies raise money from the public; all these were done, case by case, one by one.
“But now there is an opportunity to more robustly change the entire landscape to protect consumers, save lives, prevent injury and inculcate fundamental value for people, either in how they are treated, or what they use or eat. This is the transformation that calls for urgent action.
He added, “There is an urgency to protect the rights and dignity of people in this nation, there is an emergent reason to ensure that citizens are lifted up from poverty, there is an unequivocal responsibility to humanise all, and pay particular attention to the most vulnerable.”
The Director-General, CPC, Mr Babatunde Irukera, said, “Defining, promoting and protecting the rights of consumers is not only for the benefit of consumers; the concept of rights derives from the need to address and enshrine the values of our shared humanity. The basic tenets of consumer rights include value for money, dignity and honesty. As such, we are all consumers one way or the other.”
In this article:
For many years, a lot of bank customers have been losing parts of their deposits to their banks for faults that are not usually theirs.
It has been discovered that often times when depositors complained to their banks, their grievances were seldom addressed.
According to many customers, when they approached the banks, they were usually asked to fill forms, but they never got any response.
When the customers felt that they did not have what it takes to fight their banks, they gave up on their lost deposits.
But records have revealed that some displeased depositors who refused to be cheated and were ready for a showdown with their banks, actually got their monies back.
For instance, a displeased bank customer, Kemi Ibrahim, said a transfer of N250,000 that she made was not successful, but the money was not reversed.
“After three months of going to my bank and it was not resolved, someone told me he had read in the papers that I could report to the CBN. I went to the CBN office and I was put through on how to lodge my complaint. That was how I got my money back with CBN’s intervention.”
The Subcommittee on Ethics and Professionalism of the Bankers’ Committee also complements the CBN’s efforts in complaints and dispute resolution.
However, the subcommittee does not interfere in cases already being handled by the CBN or currently in court.
The Registrar, Chartered Institute of Bankers of Nigeria, Seye Awojobi, said the subcommittee had resolved more than 2,500 complaints of depositors brought before the subcommittee in the past 18 years.
Awojobi, who is also the secretary of the subcommittee, said it had helped depositors get back their monies in both local and foreign currencies.
According to him, the subcommittee always expects the complainants to first lodge their complaints with their banks, and if not resolved or still dissatisfied, they could then approach it.
The registrar said the CBN, the Nigeria Deposit Insurance Corporation and the Bankers Committee’s members are represented in the subcommittee.
“We have 90 days maximum to resolve complaints from the day you give us your petition, except where the cases require further investigation,” he said.
While only a few go the extra mile to report, many customers have actually not been able to pursue their case to a logical end.
A bank customer, Tomori Bolaji, reported to newsmen, saying, “Almost a year ago, I had an unsuccessful transaction through Internet banking and till now, my money has yet to be refunded. I filled many forms but all did not yield any result. I went to the receiving institution, but there is still no refund.”
Bolaji is worried that his bank is not even communicating with him to let him know what has happened to the money.
Another bank customer, Ayo Bamidele, said, “I withdrew N5,000 from an Automated Teller Machine and my account was debited but the money did not drop from the machine. I went to my bank on many occasions to complain but it did not resolve my matter.
“I got tired of going to complain because the stress I was going through in order to get the N5,000 was too much. So, I stopped using that bank because the treatment that was meted out to me was very annoying.”
Apart from the burden of high interest rates suffered by borrowers of bank loans, some of the most common complaints from depositors include illegal charges, failed e-transactions, dishonoured guarantees, bad customer service and lost deposits.
A depositor, James Nnamdi, said, “I had to stop recharging my phone through my mobile banking app because most times, my money is deducted and my phone is never credited.
“Even recently, I tried buying a N1,000 recharge card twice. They deducted the money twice and did not reverse the payment. Before, I used to complain to my bank, but most times I don’t have the time to go and complain. If I call the customer care line most times, the issue is never resolved.”
Sanctions
The CBN, in September 2018, released a circular on the regulation on instant interbank electronic funds transfer services in Nigeria, which was signed by its Director, Banking and Payments System Department, Dipo Fatokun, and issued to all Deposit Money Banks, microfinance banks, other financial institutions, mobile money operators, development finance institutions, payment service providers and other stakeholders.
In the circular, the apex bank introduced N10,000 fine for any failed Nigerian Instant Payment transaction not reversed into the customer’s account within 24 hours, if the sender or beneficiary complained.
It also stated that the delayed application of inward NIP into beneficiaries’ accounts beyond four minutes would attract a penalty fee of N10,000 per item.
According to the apex bank, an electronic funds transfer or an NIP happens between two distinct entities when delivery from the sending entity to the receiving entity takes place within one minute (60 seconds), while a payment system where delivery to the receiving entity occurs beyond one minute is considered to be an Automated Clearing House system.
Industry experts have commended this initiative, noting that problems, especially from failed transactions, had caused depositors a lot of pains.
For instance, a depositor from Ogun State, who simply identified himself as Mr Adewale, complained to newsmen, saying, “Someone credited my account but I did not receive any alert. After some days, I went to the bank to complain but I was told no transaction occurred. Meanwhile, the person’s account was debited. The sender went to complain and the cashier replied that the transfer was completed.”
Five months after Adewale complained, the bank had yet to sort out his problem as of the time of filing this report.
Though the fine introduced by the CBN is quite new, there is need for the depositors to be aware of their right under this new law, according to experts.
Hidden charges
Another practice by banks that many customers find nauseating is the lack of transparency when dealing with their customers, especially when dealing with loans.
According to a public relations practitioner in Lagos, Mr Tope Adaramola, banks don’t make their terms clear to their clients because at the point of collecting loans, they give an easy impression but they later start adding some hidden charges.
He said, “I have been a victim before when I collected a loan and calculated what I estimated as the projection, but along the line, they introduced some charges, which made my payment higher than it should be. This discouraged me from further borrowings.
“In a time when we are talking of financial inclusion and a great number of Nigerians are unbanked, it is very important for the banks to change their ways because they are not trusted.”
A customer, Benjamin Okotie, said that many customers usually had challenges paying bank loans because of undisclosed charges at the point of collection.
“I had to stop the collection of a loan when I asked questions and discovered that the charges they would be collecting on a loan of N18m I wanted to get was killing,” he said.
Complaints and refunds
When issues arise and customers lodge complaints, many banks are always quick to blame the customers and not ready to take responsibility for the issues.
For instance, on October 12, 2018, a bank customer, Taiye Kazeem, got a debit alert of N76,500 on his account and quickly went to the bank to enquire about what happened.
“I was asked to fill a form, which I did. When I got home, I got an SMS from my bank that my issue would be resolved on November 1.
“I felt three weeks was too long to wait for a solution; so the following day, I went back to my bank to ask why I must wait for three weeks to get a response. The bank said they had loads of complaints with them and I should wait till they would reach my turn.
“On October 30, 2018, I got another SMS from my bank saying, ‘Dear customer, we sincerely regret the delay in resolving your complaint. Our team is working’.
“Now, we are in December, I have been going to the bank but nothing has been done to my issue.”
While many displeased customers have continued their unending wait for the resolution of their complaints, records have revealed that the banks have actually been found guilty in many of the cases reported to the CBN by their customers.
Through the intervention of the regulator, many banks have been ordered to return huge sums to the customers.
For instance, the latest records obtained from the CBN revealed that the number of complaints it received from consumers of financial services rose to 1,439 in the first half of 2018 from 1,141 in the corresponding period of 2017.
The complaints were mainly in respect of excess charges, frauds, dishonoured guarantees and unauthorised deductions/transfers, among others.
A total of 2,451 complaints, including those outstanding from 2017, were resolved in the review period, compared with 1,270 complaints resolved in the same period of 2017, according to the CBN.
The central bank said total claims in the review period in local and foreign currencies amounted to N20.5bn, $163,479, £2,889.98 and €32.82, compared with N14.72bn, $2.42m and €6,940 in the corresponding period of 2017.
The CBN stated that the sum of N6.80bn, $119,349, £2,889.98 and €32.82 were refunded by financial institutions to their customers, compared with the sum of N7.21bn, $2.40m and €6,940, refunded in the same period of 2017.
Compliance
While the CBN has continued to introduce measures to check the excesses of banks, records have revealed that the banks have continued to create unnecessary worries for their customers, especially in the aspect of deducting too many illegal charges from their deposits.
For instance, a depositor, Wura Ekundayo, complained, “When I do a transaction, my bank can deduct SMS charges up to five times on the same transaction. When you look at many customers they do this to, it amounts to a lot of money to the banks.”
As part of its supervisory roles, the CBN conducted compliance examination on 21 banks in the first half of 2018 to ascertain their level of compliance with consumer protection regulations.
The regulator was particular on the ‘Guide to Charges by Banks and Other Financial Institutions.’
From its findings, the banks’ compliance with the regulation on application of SMS charges was not impressive.
The CBN said the exercise revealed that compliance levels were different.
In the aspect of interest rate on executed offer letters, it was 95.3 per cent; directive issued after the last examination and other directives were 90.0 per cent; application of SMS charges was 52.4 per cent; and outstanding complaints were 22.6 per cent.
However, it added that there was 100 per cent compliance in the areas of outward telegraph/SWIFT and related charges of 0.5 per cent, current account maintenance fee charges on savings account and validation of refunds.
As part of effort to further improve market conduct, the regulator said it developed and exposed the guidelines on complaints management to stakeholders in the review period.
According to the CBN, comments and recommendations were being implemented, following which the guidelines would be finalised.
The Chief Executive Officer, Nigeria Council of Registered Insurance Brokers, Mr Fatai Adegbenro, observed that banks usually had hidden charges, which they didn’t explain to the customers when giving out loans.
The banks, he added, were also fond of sending numerous unsolicited SMS so that they could deduct the charges too.
Adegbenro said, “Even if you don’t have loans with them, they send many SMS in a day during anniversaries to greet you, slamming you with charges that amount to a huge sum.
“Even if you want to complain, you end up wasting your time and spending more than the charges; yet they will not resolve it.”
He observed that many customers hardly checked their bank statements but that even when they did, the process of getting refund was tedious and expensive.
“If a bank has up to 10 million customers and deducts N5 on an SMS up to five times in a day, they would have made about N250m. That is why you see them declaring billions of naira as profits every year,” he said.
Reporting your bank
With the right knowledge, a depositor would not give up on his situation by forfeiting his money over a problem that was not created by him.
But either out of ignorance or impatience to take a complaint to a higher authority, many customers have allowed banks to continue to grow their profits with their money, according to experts.
For instance, a depositor, Bola Efunnowo, said, “I received an alert from my bank on the night of April 20th to the effect that I allegedly made a PoS transaction to the tune of N62,890 with a popular Nigerian airline. I rushed to the bank the following morning to report the fraud.
“I was asked to fill a form and I did that immediately. But up till now, the bank has yet to resolve the problem.”
The Director, Corporate Communications, CBN, Mr Isaac Okorafor, said customers should not always be too much in a hurry to let some grievances go away, but should take a further step by reporting to the regulator.
“We have actually helped a lot of displeased depositors to get monies from their banks after they complained,” he said.
According to him, any depositor who feels extorted by his bank, if after complaining and the bank denies, should send an email to the CBN.
He said if customers fail to lodge their complaints, it would be impossible for the CBN to go into the banking hall and defend their rights.
“The depositors should lodge their complaints with us. So, please find time to report any wrongdoings by the banks,” he said.
While he noted that there were all sorts of complaints, Okorafor said convenient banking services required various levels of investments, which customers must pay for, but only at appropriate rates.
“Banking services are not free anywhere in the world,” he added.
He explained that if a person could sit in his comfort zone to make transactions, it was only made possible because some people invested in the banks.
“It is not government subsidy; some people are paying for it but what the CBN would not do is to allow your banks to rip you off,” he said.
He said the CBN had published on its website the appropriate ways to address bank problems.
The CBN said it had directed all banks to expand their existing ATM help desks to handle all types of consumer complaints.
According to the CBN, a displeased customer should first contact his bank to lodge his complaint at the bank/branch where the issue originated, and then allow two weeks (it might be less in some banks) for the issue to be resolved.
However, if the bank failed to address it, he has the right to escalate the complaint to the Consumer Protection Department of the CBN.
According to the CBN, a depositor can only direct complaints to the CPD upon the failure of his bank/financial institution to resolve his complaint within the two-week timeline given by the CBN.
A customer can write a letter or send an email to the CPD.
The customer should address the letter to the Director, Consumer Protection Department, Central Business District, Abuja, which can be submitted at the CBN head office or at any of the CBN’s branches nationwide.
The CBN deals with all financial-related complaints so far as they are against financial institutions within its regulatory purview.
To write an effective complaints letter, the complaint, according to the CBN, should be clear and concise to avoid ambiguity.
The complaint letter (petition) should contain, among other things, the name, address, contact phone number and email of the complainant; name of the financial institution; personal banking details (do not include PIN and passwords); history/date of the transaction in dispute; and amount claimed (if any).
The complainant should also attach relevant documents to support the claim and evidence to show that he/she had first lodged the complaint at his bank.
Financial inclusion
While there is much emphasis on financial inclusion, close to 40 per cent of adult Nigerians do not have access to financial services, according to the CBN.
But records have it that banks have continued to frustrate government’s efforts to bring more people into the financial system.
On different occasions, the Federal Government had released monies to banks to be disbursed to Small and Medium-scale Enterprises.
But the banking regulator and other observers have blamed the banks for denying the small borrowers access to the funds, but investing it to increase their profits.
The Central Bank Governor, Godwin Emefiele, said that microfinance banks in the country were charging outrageous interest rates, and many SMEs were unable to access the Federal Government’s loans aimed at stimulating local production and boosting non-oil export.
He said, “Those microfinance banks that we have today are not lending loans at single interest rates today; some of them are even lending money on flat. You borrow N50,000 for 90 days, and they expect you to pay another N50,000 interest to them in another 90 days. That is outrageous and that is too exorbitant.”
According to him, there are many funds targeted at smallholder farmers as well as those who are into small businesses in Nigeria.
“We have disbursed part of the money but we, even in the banking community, are not very happy that not all those funds have been disbursed so far,” he said.
According to him, more people need to access the funds and create jobs in the economy.
“Under the central bank, we have the commercial agricultural credit loans scheme; we have N200bn set aside for SMEs. Under the central bank and the Bankers’ Committee, we currently have close to N60bn available to fund agriculture and small businesses and yet these monies are lying and not been disbursed.”
He berated the lending institutions for not being supportive enough of the Federal Government’s efforts to make cheap loans accessible to those in need of them.
Emefiele said that the Federal Government had on several occasions made funds available to the lending institutions to be disbursed to SMEs at single-digit interest rates but the banks would either not lend out the funds or make such available at double-digit interest rates.
A former President, Association of National Accountants of Nigeria, Dr Samuel Nzekwe, said the banks were supposed to be in a position of trust, but that their actions were quite disturbing.
According to him, if depositors carefully go through their bank statements, they would see charges that they were not aware of and this is quite bad.
He said there was a need for the regulator to ensure that banks charge the right rates.
While noting that the DMBs hardly lent out money, he said, “Before they give you N500,000 loan, they would have first collected N50,000 before they start charging you interest on the loans.”
According to him, the purpose of the banks is to collect money and give to those who need it, but this money is not so accessible.
He said, “If they are doing the right thing, you will see that their profits will not be what they are now. It is the illegal charges that they are imposing on customers that are making their profits huge.
Nwekwe said, “The unresolved money complaints and illegal charges form part of the huge profits they declare because if you put money in the bank and they are taking it gradually, you will see that it is part of the profits they are declaring.
“But if we are talking of financial inclusion and we want to get people into the banking system, everything must be right. The banks have to be clean and transparent.”
Building trust
According to experts, consumer protection helps to increase trust and confidence in the financial system, and it is critical in improving financial inclusion, beneficial to individuals and the economy and helps protect consumers from probable market abuse and exploitation.
The Managing Director and Chief Executive, NDIC, Umaru Ibrahim, said it was critical for the operators and regulators to cooperate on ethics and professionalism in the banking industry.
He lamented that the abuse of extant regulations and ethical standards impacted negatively on the confidence in the banking industry and the financial system in general.
The Consumer Protection Council recently quoted President Muhammadu Buhari as saying, “We have caused organisations to modify their behaviour or confront their past wrongs, whether it was an inappropriate clinical trial in one corner of the country, or how a business plies its trade in products that result in injury, or in the capital market with how companies raise money from the public; all these were done, case by case, one by one.
“But now there is an opportunity to more robustly change the entire landscape to protect consumers, save lives, prevent injury and inculcate fundamental value for people, either in how they are treated, or what they use or eat. This is the transformation that calls for urgent action.
He added, “There is an urgency to protect the rights and dignity of people in this nation, there is an emergent reason to ensure that citizens are lifted up from poverty, there is an unequivocal responsibility to humanise all, and pay particular attention to the most vulnerable.”
The Director-General, CPC, Mr Babatunde Irukera, said, “Defining, promoting and protecting the rights of consumers is not only for the benefit of consumers; the concept of rights derives from the need to address and enshrine the values of our shared humanity. The basic tenets of consumer rights include value for money, dignity and honesty. As such, we are all consumers one way or the other.”
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