The Central Bank of Nigeria (CBN) has announced plans to collaborate with the Nigerian Communications Commission (NCC) to create a unified short code aimed at enhancing the complaint resolution process for Nigerian consumers. This initiative is designed to ensure that customers can communicate with their financial institutions anytime, anywhere, even without internet access.

Dr. Aisha Isa-Olatinwo, the Director of Consumer Protection and Financial Inclusion Department at CBN, made this revelation during a virtual Consumer Protection Town Hall meeting titled “Ask the Regulator”. The event was organized by Enhancing Financial Inclusion and Advancement (EFInA).

Key Highlights of the Initiative

1. Short Code for Accessibility: The short code will allow consumers, even those without smartphones or internet access, to easily reach their banks and report issues. This move aims to improve accessibility for vulnerable consumers, such as those who use feature phones.
2. Efforts to Address Consumer Complaints: Dr. Isa-Olatinwo noted that the banking sector’s rapid transformation often leads to confusion regarding where to lodge complaints. The new short code will provide a centralized and simplified communication channel for consumers to resolve issues efficiently.
3. Consumer Protection Milestone: Dr. Isa-Olatinwo also shared that the CBN has achieved a 94% month-on-month timely resolution of consumer complaints, further demonstrating the regulator’s commitment to safeguarding consumer rights.
4. Collaboration with Banks: The CBN is working closely with banks to streamline complaint resolution processes. Banks have often claimed that CBN favors consumers, but Dr. Isa-Olatinwo clarified that the CBN’s main objective is to maintain financial system stability while protecting consumers.

Survey Results and Consumer Concerns

An EFInA poll conducted among Nigerian consumers revealed important insights:

• 66% of respondents are aware of the steps to lodge and escalate complaints.
• 61% of respondents had experienced failed transactions in the past 12 months.
• 26% reported that failed transactions were reversed within 24 hours, while 54% had their reversals completed within 24 to 48 hours.
• 6% of respondents experienced fraud, and 15% reported issues with poor customer service or hidden charges.

Fraud Insurance Advocacy

In response to ongoing concerns about fraud, Mrs. Sola Salako-Ajulo, President of the Consumer Advocacy Foundation of Nigeria (CAFON), highlighted the need for fraud insurance. She suggested that fraud insurance would allow banks to immediately reverse fraudulent transactions, refund the consumer, and investigate the matter. This would shift the burden of proof from the consumer to the bank, protecting customers during fraud disputes.

Salako-Ajulo also pointed out that, unlike in more developed economies, Nigeria lacks such an insurance system, which often leaves consumers exposed during fraud-related disputes.

Dispute Resolution Between Customers and Merchants

During the event, Mr. Ajibade Laolu-Adewale, Chairman of the Committee of e-Business Industry Heads (CeBIH), raised concerns about the handling of disputes between customers and merchants. He stated that bank staff should never redirect customers to merchants in cases of failed transactions.

He emphasized that regulations are clear: the dispute should be between the acquiring bank and the issuing bank, and both banks must engage with each other to resolve the issue in favor of the consumer.

CBN’s Continued Commitment to Consumer Protection

The CBN’s effort to create a short code for faster complaint resolution underscores its continued commitment to consumer protection and financial inclusion. The central bank is working tirelessly to ensure that consumers’ rights are upheld while also fostering stability in the financial sector.

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Key Takeaways:

• CBN is working with NCC to create a short code to help consumers resolve complaints easily and promptly.
• The initiative will help vulnerable consumers who lack internet access or use feature phones to contact financial institutions.
• The CBN has achieved 94% timely resolution of consumer issues and aims to further streamline complaint handling.
• Fraud insurance is being advocated to protect consumers and improve fraud-related dispute resolution.