News / National
Protect financial services consumers: Welshman Ncube
20 Jun 2011 at 06:22hrs | Views
Trade and commerce minister Welshman Ncube has called for concrete action and strengthening of consumer protection in the financial services sector.
Ncube said there is no doubt on the link between protecting consumers from abusive products and practices, and the safety and soundness of the financial services system.
"There should be reciprocal trust and respect between service providers and consumers, a kind of bond that binds them either to honour one's duties. I believe that all the consumers are questing for is fair treatment premised on the respect for fundamental rights," he said
The development comes after hordes of Zimbabweans lost their deposits during the hyperinflationary era.
Ncube said it is of paramount importance that consumers receive clear, sufficient, reliable, comparable and timely information about financial service products.
"Contracts must include clear up-front pricing so that consumers can appreciate the cost of the product before becoming obliged to pay. Financial service providers should be responsible for testing quality and comprehensiveness of information provided with additional audits conducted by national regulators," he said.
He further called for the creation of a national financial consumer protection body.
"Under the UN guidelines for consumer protection, all governments have a responsibility to protect and promote consumer rights. Governments should each establish a national body that has consumer protection as an explicit regulatory objective with full authority to investigate, halt and remedy violation of consumer protection laws including where necessary, the right to define specific practices," he said.
The ministry of trade and commerce is currently playing the role of overseer of consumer protection with various regulatory bodies in place to regulate specific sectors of the economy such as telecommunications, financial services and energy.
"Perhaps in the immediate future, we may need to establish a national body," Ncube said.
Ncube said Government will ensure that consumers have access to adequate redress mechanisms in bid to reduce the demand for individual proceedings.
It is my fervent belief that the Consumer Protection Act still being drafted will address the challenges being faced by the current redress mechanisms as it is clear that they are being overwhelmed by the sheer number of complains relating to financial services," he said.
Ncube further called for greater transparency and accountability in the financial services sector. He said this could be achieved by developing systems to assess consumers' capacity to take on financial commitments, giving consumers access to risk data regarding individual financial service providers and ensuring that loan assignees should be liable for the practice of the original credit granter.
Ncube said there is no doubt on the link between protecting consumers from abusive products and practices, and the safety and soundness of the financial services system.
"There should be reciprocal trust and respect between service providers and consumers, a kind of bond that binds them either to honour one's duties. I believe that all the consumers are questing for is fair treatment premised on the respect for fundamental rights," he said
The development comes after hordes of Zimbabweans lost their deposits during the hyperinflationary era.
Ncube said it is of paramount importance that consumers receive clear, sufficient, reliable, comparable and timely information about financial service products.
"Contracts must include clear up-front pricing so that consumers can appreciate the cost of the product before becoming obliged to pay. Financial service providers should be responsible for testing quality and comprehensiveness of information provided with additional audits conducted by national regulators," he said.
"Under the UN guidelines for consumer protection, all governments have a responsibility to protect and promote consumer rights. Governments should each establish a national body that has consumer protection as an explicit regulatory objective with full authority to investigate, halt and remedy violation of consumer protection laws including where necessary, the right to define specific practices," he said.
The ministry of trade and commerce is currently playing the role of overseer of consumer protection with various regulatory bodies in place to regulate specific sectors of the economy such as telecommunications, financial services and energy.
"Perhaps in the immediate future, we may need to establish a national body," Ncube said.
Ncube said Government will ensure that consumers have access to adequate redress mechanisms in bid to reduce the demand for individual proceedings.
It is my fervent belief that the Consumer Protection Act still being drafted will address the challenges being faced by the current redress mechanisms as it is clear that they are being overwhelmed by the sheer number of complains relating to financial services," he said.
Ncube further called for greater transparency and accountability in the financial services sector. He said this could be achieved by developing systems to assess consumers' capacity to take on financial commitments, giving consumers access to risk data regarding individual financial service providers and ensuring that loan assignees should be liable for the practice of the original credit granter.
Source - thebusinessdiary
