The Central Bank of Nigeria (CBN) has instructed banks and other regulated entities to provide customers with prior notifications regarding outstanding debts before initiating any debt collection measures.
This directive, has been outlined in the recently released “Revised Consumer Protection Regulations” on Thursday via the CBN’s website to promote transparency, courtesy, and fairness in the debt recovery process.
The regulations emphasized the importance of adhering to consumer protection principles, ensuring that financial institutions prioritize consumer rights and offer better outcomes and access to financial services.
Specifically, the document mandates that foreclosure actions should only be taken as a last resort, with options such as private sales offered to customers before foreclosure proceedings begin, in accordance with a 30-day timeframe.
“Customers should be given the option of a private sale before foreclosure, which must be exercised within 30 days unless the customer has waived this right,” the document stated.
The revised regulations also impose strict guidelines on the actions of financial service providers (FSPs), stipulating restrictions on contacting individuals associated with the customer and mandating the protection of consumer assets.
It stated, “Providers are not allowed to contact friends, employers, relatives, or neighbors for any information other than employment status, telephone numbers, or address. The only exception is if the person has guaranteed the loan or has given consent to be contacted.”
FSPs are required to implement measures to prevent fraud, including automated transaction monitoring and educating customers on fraud threats.
The regulations stress the importance of data privacy, requiring FSPs to obtain written consent from consumers before collecting and processing personal data, with clear options for opting in or out of data sharing.
The CBN emphasized that these measures are essential for safeguarding consumer interests in the evolving financial services landscape, prompting the review of the 2019 Consumer Protection Regulations.