Domesticating ‘Fair Digital Finance’

Given the vulnerability of consumers on digital platforms, ONYEKORMAKA ASABOR writes on the need for regulators to domesticate the 2022 World Consumer Rights Day theme, ‘Fair Digital Finance’, to protect consumers from fraudsters

Theme for the 2022 World Consumer Rights Day, which was marked on March 15, is ‘Fair Digital Finance’. It was geared towards sensitising vulnerable consumers on the need to be safety-conscious while buying products online. As noted by consumer advocates, the theme is clearly an indication that the international consumer body is poised to build on the success of the ‘Better Digital World’ campaign of 2017.

This year’s theme, which is synonymous with that of 2017 and 2018, is aimed at promoting digital marketplaces that would be safer and fairer for consumers across the globe.

There is no denying the fact that e-commerce, or buying products and services online, has transformed the way consumers pay for products and services. Unarguably, due to the development, the membership of Consumers International, which is up to 200 groups in 100 countries, chose ‘Fair Digital Finance’ as the theme. 

The members, at the celebration of the yearly event, in March 2022, stressed, “By 2024, digital banking consumers are expected to exceed 3.6 billion. In the developing world, as the proportion of account owners sending and receiving money digitally has grown from 57per cent in 2014 to 70 per cent in 2017.

“Digital finance brings new opportunities, but also new risks that can lead to unfair outcomes for consumers. It can increase the likelihood that the most vulnerable are left behind.”


Changing the narrative

On the issue, Mr Chukwuebuka Amos, a consumer rights enthusiast, said, “At this juncture, it is possible that under Consumer International, with Helena Laurent as Director-General, Digital Financial Services can empower consumers everywhere. To achieve this, DFS must be inclusive, safe, data-protected, private and sustainable.

“On inclusivity, everyone, including women and other vulnerable consumers, can easily access affordable and reliable DFS. Services are designed to meet consumers’ needs and promote financial wellbeing. Consumer choices are underpinned by intuitive and inclusive design that builds financial capability.”

On safety, he asserted that aside getting maximum benefit from DFS, consumers are confident that their money is secure and accessible, coupled with timely advice and redress when things go wrong.

“Protection of consumers from the perspective of fair digital finance also dwells on the reality of the existence of technology that is vulnerable to hackers as well as illegal actors that create substantial risks to security and privacy. In a similar vein, frauds are increasing exponentially, even as consumers risk not just loss of money but loss of personal data too, which can never be recovered,” he added.


Legal action against defaulters

Ostensibly against the foregoing, it would be recalled that the Federal Competition and Consumer Protection Commission, early this year, canvassed a law for digital banking operations to prevent unlicensed operators from posing a threat to Nigerians.

During a summit on World Consumer Rights Day in Abuja, the Executive Vice Chairman of FCCPC, Babatunde Irukera, said lack of existing laws hinder the commission from protecting Nigerians from the risks associated with the sector.

Irukera said a raid led to the confiscation of 119 laptops, eight mobile phones and one hard drive that were used to harass defaulters of loans, which led many to depression, while some committed suicide because they could not withstand the backlash of the actions of the operators.

“Some of these operators are not registered by the Central Bank of Nigeria. We have to look at how we can bring them under our regulatory framework, so that we can hold them responsible. Otherwise, there is nothing we can do as an agency to sanitise the sector and prosecute them. With this, Nigerians will continue to fall prey to their gimmicks,” he said.

CBN Governor, Godwin Emefiele, who was represented by the apex bank’s Director on Consumer Protection, Rasheeda Monguno, noted that while DFS made transactions seamless and incorporated many Nigerians into the financial sector, it also exposed Nigerians to high fraud risks.

Emefiele added that the apex bank was working on a regulatory framework that would protect consumers from online lenders.


Poor public awareness and DFS risks

Irrespective of efforts to protect consumers in the digital sector of the economy, Mr Uwem Imoh, a banker, said many factors impede the protection of consumers from cybercrime in the Nigerian financial sector.

He said, “In this regard, a major challenge is the issue of poor public awareness regarding cybercrimes that target electronic banking and payment platforms. This lack of awareness can be traced to low level of cyber security awareness due to poor consumer education, as well as ineffective and poorly disseminated consumer enlightenment programmes.

He added, “The problem of lack of awareness is further compounded by low level of tech literacy. Many consumers lack basic knowledge on how to conduct electronic financial transactions, and have to seek the assistance of third parties, which then results in the disclosure of confidential banking details such as the Personal Identification Numbers of their bank cards. This lack of tech literacy also leads to situations whereby consumers may respond to unsolicited communications criminals from purportedly coming from financial institutions requiring them to disclose their personal banking details. 

Against the foregoing, it is expedient that the theme of the 2022 World Consumer Rights Day, ‘Fair Digital Finance’, be domesticated by relevant agencies to protect consumers in the digital finance sector of the economy, as the theme lays much emphasis on sensitising customers in the sector on how to protect themselves from scammers. 

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