CBN Reinforces Consumer Protection: New Guidelines for Transparent Debt Recovery

In a commitment to consumer protection, the Central Bank of Nigeria (CBN) has issued revised guidelines mandating regulated entities to inform customers about outstanding obligations before commencing debt collection processes. This initiative aims to ensure transparency, courtesy, and fairness throughout the debt recovery procedure.

Unveiled through the “Revised Consumer Protection Regulations” on Thursday, the CBN emphasized the importance of financial institutions adhering to consumer protection principles. The regulations outline consumer rights, intending to enhance outcomes and streamline access to financial services.

The document underscores that foreclosure should be pursued as a last resort, following the exhaustion of all other recovery alternatives. Foreclosure, the legal process transferring property ownership to the lender in case of loan payment default, should only occur after providing customers the option of a private sale within 30 days.

Moreover, the CBN mandates financial service providers to utilize net proceeds from foreclosures to settle the loan account and notify customers of the remaining balance. Banks are required to furnish comprehensive reports on collateral sales, ensuring transparency in the process, expenses, and net proceeds. The apex bank holds banks accountable for the conduct of debt collection agents.

The guidelines also set limitations for loan providers regarding communication with individuals associated with a customer. Providers are restricted from contacting friends, employers, relatives, or neighbors for information other than employment status, telephone numbers, or address, except when the person has guaranteed the loan or provided consent.

Additionally, banks must safeguard customers’ assets, bear responsibility for losses resulting from control breaches, test products with consumers to minimize fraud and errors, and implement transaction authentication measures.

This move by the CBN reinforces its commitment to fostering a fair and transparent financial environment, prioritizing consumer rights and protection in the debt recovery process. Stay informed as these guidelines shape the landscape of financial interactions.

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Ilesanmi Adekanbi

Ilesanmi Adekanbi, writers and loves writing the story of politics, He is a movie addict. Adekanbi is a Senior Content Creator at Newsflash Nigeria contact me on email:

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