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Emerging trends in Nigeria’s digital financial (“DFS”) consumer protection include aggressive marketing communications and cross-selling, data mining, unfair contract terms, unclear product subscriptions, hidden charges, charge-backs, penalties, together with issues respecting variation of mandates or instructions in the event that a digital financial consumer is permanently or temporarily incapacitated. Federal Government of Nigeria is committed “to reposition the Nigerian economy in order to take advantage of the many opportunities that digital technologies provide”. In view of the apparently overlapping functions of consumer protection department of Central Bank of Nigeria (the “CBN”) with the federal competition and consumer protection commission (“FCCPC”), we note that the requisite skillset for effective consumer protection include qualitative assessment and skills of how a regulator deals with digital financial consumers - a skillset that CBN as a specialized regulator could more easily improve upon or acquire than the FCCPC which is a generalized agency of the federal government. The scope of our study is limited to digital financial consumer protection of financial institutions regulated by the CBN and does not extend to other microcredit institutions or other financial services that may include pension and insurance.
Emergent trends in Nigeria’s digital financial consumer protection cut across pre-
contractual, contractual and post-contractual digital financial services between a financial
institution and a digital financial consumer.
The Federal Competition and Consumer Protection Act, 2018 (“FCCPA 2018”), provides
a detailed and generalized consumer protection framework that as well apply to Nigeria’s
digital financial (“DF”) consumers.
A consumer include any person (a) who purchases or offers to purchase digital financial
services (“DFS”) otherwise than for the purpose of resale but does not include a person
who purchases DFS for the purpose of payment aggregation or processing such as a
relationship between a mobile money operator and a deposit money bank in respect of
Settlement Account; or (b) to whom a DFS is rendered1.
Central Bank of Nigeria’s (“CBN”) Consumer Protection Framework, 2016 (the “CP
Framework”), defines a consumer as a person or an entity that uses, has used or as
potential user of DFS or digital financial products offered by a Financial Institution 2 (an
Under the regime of FCCPA 2018, an offeree, that is, a person who offers to purchase
DFS from an FI or financial technology company is a consumer. Our use of FI herein
applies to any financial institution or financial technology company regulated by CBN
and does not extend to microfinance institutions not regulated by the CBN or to pension
fund administrators or insurance companies and other digital financial services providers.
The FCCPA 2018, did not distinguish consumers of DFS from any other consumers of
services or goods, whether digital or in-person. Neither does FCCPA 2018 more
intentionally provide remedies for digital rights violations such as aggressive marketing
or cross-selling of digital financial services that are not regulated by CBN.
In addition to FCCPA 2018, the following legislations, frameworks, directives, and
regulations govern DF consumer protection in Nigeria:
(a) CP Framework;
(b) CBN’s regulation on instant (inter-bank) electronic funds transfer services in
Nigeria, 2018;
(c) CBN’s guidelines on operations of electronic payment channels in Nigeria, 2016;
(d) CBN’s regulatory framework for the use of unstructured supplementary service
data (USSD) for financial services in Nigeria, 2018;
(e) CBN’s guidelines for the regulation of agent banking and agent banking
relationships in Nigeria, 2016;
1 Section 167(1), FCCPA 2018, p. 88
2 Regulation 1.3, consumer protection framework, 2016, p.7.
%29.pdf> , accessed on 19/11/2019.
(f) CBN’s clean note policy, 2019;
(g) CBN’s guidelines on point of sale (POS) card acceptance services, 2011;
(h) CBN’s guideline for the licensing, operations and regulation of credit bureaux and
credit bureau related transactions in Nigeria, 2013 and;
(i) Credit Reporting Act, 2017.
Broadly, the federal ministry of communications and digital economy is saddled with the
responsibility of realizing Nigeria’s federal government’s commitment “to reposition the
Nigerian Economy in order to take advantage of the many opportunities that digital
technologies provide.”3
New financial technologies give rise to digital financial consumer protection questions
that are yet to be pronounced upon by Nigeria’s judicial authorities or consumer
protection agencies this may be exacerbated by the seeming difficulties in access to
justice in Nigeria that reasonably include exponential costs of prosecuting appeals and
levying execution of judgments.
Customer Protection Department of the CBN (the “CPD of CBN”) was established in
year 2012. As at July, 2015, the CPD of CBN had received 5, 621 complaints from
financial services customers and apparently saw to the refund of 19.079 billion4. DFS
consumers related complaints were not separated from other financial consumers in the
2015 report.
The CPD of CBN was established further to CBN’s mandate to promote sound financial
system to, amongst others, ensure financial literacy and consumer protection. It is argued
that CBN has an implied duty of customer protection only.5
Banks and Other Financial Institutions (amendment) Act, 2020 (“BOFIA 2020”), takes
priority over FCCPA 2018 in the event of any conflicts between the provisions of BOFIA
2020 and FCCPA 20186. In our view, this may not directly relate to questions affecting
consumer protection in Nigeria.
Appeals from Competition and Consumer Protection Tribunal (the “Consumer tribunal”)
whose judges share equal jurisdiction with federal or state High Courts in respect of
matters affecting DFS consumers’ claims under FCCPA 2018 lie at the Court of Appeal –
given its coordinate jurisdiction with the High Courts7.
3 National Digital Economy Policy and Strategy (2020-2030), 2019, p. 7, <
policy-and-strategy/file>, accessed on 11/9/2021.
4 FAQs, 2015, p. 1 <>, accessed on 13/09/2021.
5 World Bank’s Diagnostic Review of Financial Consumer Protection, Key Findings and
Recommendations, June 2017, Item II, Point 33, p.28, <
accessed on 13/9/2021
6 Section 53 (1) & (2) of BOFIA 2020, P. 51
7 Sections 39(1) & 55(1), FCCPA 2018, Op. Cit.
It appears that the Consumer tribunal is yet to exercise its original jurisdiction8. It is our
clear view that any DFS consumers’ appeal against the decision of CPD of CBN lies at
Consumer tribunal9, that is, after the federal competition and consumer protection
commission (the “FCCPC”) had presided over such matters. Subject to any memorandum
of understanding between FCCPC and CPD of CBN.
Should these external dispute resolutions be made more efficient, it will assist in
decongesting the Nigerian courts as well as enhance digital financial consumers’ access
to justice, in a timely and affordable manner. A small claims’ court model could be
employed to resolve DFS monetary questions within a minimum threshold.
- Small claims court model within Lagos State Judiciary allows claims under a roof of set
threshold of monetary claims subject to ordinary conditions for jurisdictional questions,
to be resolved speedily and in a less technical manner through standard forms instead of
usual pleadings.
FCCPA, Consumer tribunal and, CPD of CBN are yet to optimally perform their crucial
role of protecting DFS consumers and every consumer in Nigeria.
The World Bank’s Diagnostic Review of Financial Consumer Protection10 confirms that
there are only 9 staff in the market conduct unit of the CPD of CBN responsible for
consumer protection supervision and 35 staff for dealing with complaints. These 44 staff
of the CBN are responsible for and should be responsive to over 30 million DFS
consumers in Nigeria together with about 14 support staff.
Where an FI owes its customer a duty of care the FI has a duty to exercise reasonable
care and skill in carrying out the business of its customer.11
As noted earlier the FCCPA 2018 or any regulations thereto, together with CBN’s
regulations or directives strictly regulate any digital financial consumer contracts with
FIs. Equitable principles and common law rules apply as well.
The CBN admits that in furtherance of its “statutory responsibility to promote confidence
in the financial system, it had over the years implemented a measure of consumer
protection mainly in the form of customer complaint management. …thus, while a
limited consumer protection framework did exist in the banking industry, it was
inadequate. As a result, consumers’ rights were not sufficiently protected.”12.
CBN’s drive for financial inclusion and cashless policy respectively began in years 2012
and 2013, with a further revision of its National Financial Inclusion Strategy in year
8 Section 39(2), Ibid, p. 27.
9 Section 47(b)Ibid.
10 Key Findings and Recommendations, Loc. Cit. p.8.
11 Mainstreet Bank Ltd v. Juumanwin Nigeria Ltd, (2013), LPELR-21855 (CA), PP 30 – 30.
12 CBN’s portal <>, accessed on 11/9/2021
In year 2011, CBN through its Guidelines on Point of Sale (POS) Card Acceptance
Services began to seek to protect consumers of DFS in Nigeria.
Combined low level of financial literacy, consumer rights awareness and high cost of
dispute resolution hinders the development of a robust consumer protection regime in
Nigeria together with other forms of corrupt practices in Nigeria’s judiciary or legal
services market.
The federal government of Nigeria clearly expressed its commitment to a digital
economy vide its year 2019, National Digital Economy Policy and Strategy (2020-2030)
(the “NDEPS”) that flows from its Economic Recovery & Growth Plan 2017-2020 (the
“ERGP, 2017”).
The ERGP 2017 envisioned a sustained inclusive growth aimed at increasing national
productivity and a diversified national economy. While the 5th pillar of the NDEPS hopes
to adopt an approach that takes into account the vast numbers of SMEs in Nigeria and the
strong desire to encourage them to embrace innovation development enterprises.”13
ERGP 2017 and NDEPS do not, in our view, confer any rights on any DFS consumer in
Nigeria, nor was it intended to. It is a laudable directive of the federal government, that
we eagerly look forward to its multiple fruitfulness.
IPA (Innovation for Poverty Action) in its year 2021 survey report claims that Nigeria’s
DFS consumer suffered extra or unclear fees and charges, while lower-income and lower-
education consumers are very unlikely to use formal redress channels when problems
From time-to-time, one could hear Nigerians express views such as “would anyone
want to challenge a Nigerian bank given that it is an institution and one is an individual”.
FIs ride on similar assumptions that are some citizen’s manifestation of lack of
confidence in Nigeria’s judiciary to run roughshod over DF consumers’ rights, with
Appropriate, well-coordinated and accessible digital financial consumer protection
regime would assist CBN’s drive for a more informed digital financial marketplace that
will positively impact on Nigeria’s financial inclusion agenda.
Digital Financial Consumers’ Protection
The objective of FCCPA 2018 include to promote and maintain competitive markets in
digital financial services, - a role that CBN is notably readier to assume - promote and
protect DFS consumers’ interest and welfare by providing DFS consumers with wider
variety of quality digital products at competitive prices as well as to prohibit restrictive or
13 National Digital Economy Policy and Strategy (2020-2030), Op. Cit. p. 31
14 IPA, Consumer Protection in Digital Finance Users Survey in Nigeria, < https://www.poverty->, accessed on
unfair business practices which prevent, restrict or constitute an abuse of a dominant
position or market power in Nigeria15.
The CPD of CBN as a sector specific regulator under the FCCPA 2018 should develop
more capacity to act as external dispute resolution in respect of DFS instead of FCCPC.
Although we did not sight any memorandum of understanding (“MoU”) entered into
between the FCCPC and CPD of CBN, it appears that a binding MoU exist between
FCCPC and CPD of CBN pursuant to section 105 (4) & (5) of FCCPA 2018.
We adopt the following stages in DFS customer relationship: pre-contractual; contractual
and; post-contractual. We shall attempt to x-ray digital financial consumers’ protection
under those stages.
Marketing communications
FCCPA 2018 subject to the provisions of Constitution of the federal republic of Nigeria
and latter legislations that include BOFIA 2020 override any other legislation or
regulations in matters affecting competition and consumer protection in Nigeria. CBN
shares concurrent jurisdiction with the FCCPC on matters affecting digital financial
BOFIA 202017 provides general restrictions on advertisement on DFS and requires that
any marketing communications in respect of DFS will be in accordance with the
regulations18. We are not aware that CBN has established any regulations pursuant to
BOFIA 2020 or its CP Framework.
FIs shall not in marketing or sales promotion of any DFS to a digital financial consumer
either directly or indirectly make any representation that:
(a) is likely to imply false or incorrect information;
(b) is reasonably likely to mislead or, misleading in any material respect;
(c) is erroneous, fraudulent or deceptive in respect of benefits, conditions or terms of
contract, interest rates or warrant conditions.
The CP Framework requires FIs to assess the financial capabilities of DF consumers and
to offer only suitable products or services based on customers’ needs and capability19.
15 O. Enwe , Nigeria’s Consumer Protection Regime: A Duster on Validity of Limitation Clause in
Domestic Carriage of Goods?, 24/08/2021, <
regime-a-duster-on-validity-of-limitation-clause-in-domestic-carriage-of-goods/>, accessed on
16 Sections 104 & 105(2) of the FCCPA 2018, p.57.
17 Sections 44 BOFIA, 2020, Op. Cit.
18 Sections 44(1) & (3), Ibid.
19 Reg.2.2, Consumer Protection Framework, 2016 p.13
All marketing communications between FIs and DF consumers must convey complete
and accurate information on the products or services being advertized20.
Factually accurate information on digital financial services or products is to enable DF
consumers make informed decisions. Any such information must be timely, detailed and
International mobile money remittances service providers are to ensure that DF
consumers understand specific nature of the transactions and are required to make
adequate disclosure of relevant information22.
Contract documentations
Analogous to contract documentation is the right to choose an FI which is expressed in
FCCPA 201823 together with the digital financial consumers’ right to account portability
or switch24.
Bank account switch or a consumer switching from one FI to another FI is yet to be
implemented by CBN or enforced by FCCPC or any other competent judicial authority in
CP Framework requires FI to disclose and document terms and conditions of DFS that
may include inherent risks, fees, charges, interests, and other payments to be made by a
DFS consumer for a product or service25.
We are not aware of any guidelines that CBN has issued on disclosure requirements for
products or services in contract documentation between any FIs and DFS consumers.
Any such guidelines should at a minimum cover fees, charges, penalties (prepayment
costs or default charges), interests (payable or receivable), payment and termination
modalities, and risks26.
A DFS contract should where applicable include a variation or alteration clause. Variation
or alteration clause should not impose any liabilities or added risks on a DFS consumer
otherwise it will be null and unenforceable pursuant to FCCPA 201827.
A DFS consumer who holds an ATM (automated teller machine) card is entitled to
reasonable notice before changes are made to the terms and conditions of his ATM card
contract and shall be given the option to opt out of the card contract, without penalty28.
20 Reg. 2.3, Ibid.
21 Ibid.
22 Clause 15.0(a), Guidelines on International Mobile Money Remittance Services in Nigeria 2015, p.19.
23 Section 119, FCCPA, Op. Cit., p. 27.
24 Reg.2.8.2 Consumer Protection Framework, Op. Cit. p.28
25 Reg. 2.3.1, Ibid.
26 Ibid.
27 Sections 124 & 129(1)(c) of FCCPA 2018, Op. Cit.
28 Clause, Guidelines on Operations of Electronic Payment Channels in Nigeria, 2016, p.21.
DFS contract must be documented in a precise, clear language and, in legible font size.
Should any technical terms be used, the FI shall ensure that such technical terms are
clearly explained to the understanding of the DFS consumer to avoid confusion or
In certain circumstances, acceptance of digital financial services or products is a deemed
execution of contract and the legal requirement of in-person execution would be deemed
Loans Microcredits and Debt Collection
The CP Framework requires FIs to self-regulate. These self-regulatory activities include
norms aimed at ensuring a positive credit culture in digital financial services sector. FIs
are to establish structures to prohibit reckless and predatory lending30.
FIs are required to provide credit counselling to DFS consumers to prevent DFS
consumers’ indebtedness due to limited financial knowledge or skill. These credit
counselling will include educating consumers on borrowing and debt settlement31.
FIs shall provide detailed information on the terms and conditions of a digital credit
agreement to consumers prior to executing any loan agreement. Any terms and conditions
must at a minimum include the pricing, repayment schedule, repayment amount, tenure
and opt out options32.
A consumer enjoys a right to be notified by an FI at least 10 business days (or 3 business
days if FI is a microfinance bank) in advance of any change in applicable interest rate on
loans33 provided that the consumer may rescinded any loan within 7 days from the date of
execution or 3 days if the FI is a microfinance bank. This is known as the cooling-off
Pursuant to CP Framework, the CBN undertook to set guidelines for ethical debt
collection practices that will be applicable to DFS35. We are not aware that CBN has
implemented any guidelines on ethical debt collection even as debt collection practices
that include whitelisting creditors at any credit bureau rages on36.
Any such guidelines will hinge on dialogue, respect for the consumers’ privacy and
longevity of DFS consumer and FI relationships37.
Should a DFS consumer be unable to meet its financial obligations, an FI is encouraged
to adopt fair and ethical debt recovery practices. Personnel or agents of FIs assigned to
29 Reg. 2.3.1, Op.Loc. Cit.
30 Reg. 2.2.2 (1), Ibid, p.14
31 Reg. 2.2.2 (2), Ibid.
32 Reg. 2.2.2 (1), Ibid.
33 Section II, Circular to All Banks and Discount Houses: the Revised Guide to Bank Charges, 2019.
34 Foot note, Ibid.
35 Reg.2.2.4(1), Consumer Protection Framework, Op. Cit. P.15
36 O. Enwe, Liabilities for Inaccurate and False Information Supplied to a Credit Bureau in Nigeria,
3/09/2021, <
credit-bureau-in-nigeria/>, accessed on 19/9/2021.
37 Reg. 2.24(2), Ibid
recover debts should be properly trained. Consumers shall be informed in advance before
a recovery process is initiated38.
Electronic Banking
CBN’s Guidelines on Operations of Electronic Payment Channels in Nigeria, 2016, (the
“Electronic Payment Guidelines”) is the major framework for electronic fund transfer in
All ATMs (automated teller machines in Nigeria shall be able to dispense all Naira
denominations39 in clean notes40. FIs observe this duty in breach, given that ATM
predominately dispense N500 and N1000 only.
Notably, 2% of ATMs deployed by each acquirer shall have tactile graphic symbol for the
use of visually impaired DFS consumers. Locations of such ATMs are to be visibly
publicized on each FIs’ website at the minimum. This should be complied with within 5
years from the release of these standards41.
Year 2021 is the 5th anniversary of the Electronic Payment Guidelines and there appears
to be zero compliance as at 3rd week of September, 2021. Persons living with disabilities
or interest group should endeavour to compel FIs to comply to ATM tactile graphic
symbol requirement from January, 2022.
DFS consumers ought to enjoy not more than 72 consecutive hours downtime (due to
technical fault) on any ATM and, where this is not practicable, FIS should inform
Digital financial consumers reserve a right to be informed of any scheduled maintenance
of ATM in Nigeria43 – this best practice requirement is to avoid loss of time and resources
that will result from visiting an ATM that is under maintenance or unapologetically under
“service in progress”.
Credit reporting
The Credit Reporting Act, 2017 (the “Credit reporting Act”) incorporated CBN’s
Guidelines for the Licensing, Operations and Regulation of Credit Bureaux and Credit
Bureaux Related Transactions in Nigeria, 2013 (the “Credit Bureau Guidelines”), to the
extent that the Credit Bureau Guideline will be read to conform with the provisions or
objectives of the Credit reporting Act.
It appears that an FI may report a defaulting DFS consumer to a credit bureau upon notice
of demand and after the cooling-off period of 7 or 3 business days applicable to
commercial banks or microfinance banks in Nigeria.
38 Ibid.
39 Clause 1.1.1(b), Electronic Payment Guidelines, 2016, p. 5.
40 Clause 1.3(j), Ibid.
41 Clause 1.1.1(9), Ibid.
42 Clause 1.3(a), Ibid.
43 Clause 1.4(a), Ibid.
Provided that the FI requested a DFS consumer’s consent in writing to disclose credit
information to credit bureaux at the time parties entered into the DFS contract.
FI must not intentionally or negligently provide or report inaccurate, incomplete,
misleading or false information of any DFS consumer to a credit bureau.
Apparently, FIs are not allowed to whitelist a consumer’s account prior to a demand in
writing duly issued after the cooling-off period.
Durable Financial Power of Attorney
A financial power of attorney is a legal document that grants a trusted and named agent
the authority to act on behalf of the principal in financial matters44 even after the principal
has become incapacitated (“FPoA”).
Nigeria does not have any specific power of attorney legislation. Yet right to own
property is a human right recognized by the Nigerian Constitution. The right to distribute
or plan one’s estate or administer an estate flows from the Nigerian Constitution and are
more specifically regulated by administration of estate laws enacted by different States in
We find nothing in the administration of estate laws that could be reasonably stretched to
prohibit an FI from acting on a digital financial consumer’s validly executed FPoA that
authorizes a named person to perform any transactions on behalf of the DFS consumer in
the event of incapacitation, whether temporary or permanent.
It is not infrequent, that digital financial consumers suffer medical conditions that render
them incapable of performing digital financial services. Had the consumer duly executed
a FPoA in favour of a named agent, the FI ought to honour any such instructions.
Given that it is an affair consistent with the parties’ contract and not opposed to any
legislation in Nigeria, subject to any customary requirement of indemnity or variation in
Dispute Resolution
The CP Framework provides for internal dispute resolution that are proper to FIs and an
external dispute resolution that may include CPD of CBN, FCCPC, the Consumer
tribunal and any other stakeholders.
The following regulations and guidelines of CBN subject consumer related disputes to
arbitration pursuant to the Arbitration and Conciliation Act, laws of the federation, 2004:
(a) The CP Framework;
(b) Credit Bureau Guideline;
44 Investopedia, Financial Power of Attorney
<>, accessed on 19/9/2021.
(a) Standards and guidelines on ATM Operations in Nigeria;
(b) Guidelines for the Operation of International Money Transfer Services
Operators in Nigeria, 2014;
(c) Guidelines on Operations of Electronic Payment Channels in Nigeria, 2019
(d) Guidelines for the Operation of International Money Transfer Services
Operators in Nigeria, 2014.
Unarguably, arbitration is not cost-effective for a low-to-medium income DFS consumer.
A dispute resolution system that is transparent, accessible and generally cost-effective for
a DFS consumer may be more beneficial instead of arbitration proceedings.
CPD of CBN is more adaptable to cost-effectiveness than arbitration or the court, given
that a complaint via email is sufficient to invoke the attention of CBN, who could resolve
any such complaints within 2 weeks.
Effective redress assists in ensuring that substantive consumer protection measures are
themselves effective (such as by resulting in mitigation and in compensation where
appropriate and bringing about changes in behavior and industry practice)45.
Without clear and consistent data, it may be arguable that digital financial consumer
complaints would be successfully resolved without the need for recourse to an external
dispute resolution scheme. Nevertheless, there remains a need for an independent
external dispute resolution scheme for those complaints that are not resolved through the
internal dispute resolution system46.
Nigeria Data Protection Regulation 2019 (“NDPR 2019”) governs all data related issues
that may arise from a DFS. Data mining, marketing communications without any opt-out
option and any other form of data surveillance or espionage are offensive to NDPR 2019.
Rights to factually correct information, clearly documented agreement, civilized way of
debt recovery and clear charges or interest are emergent aspects of digital financial
consumer protection. CPD of CBN as an eternal dispute resolution body should be better
enabled to deal with the flux of complaints that arise from DFS more as a confidence
builder than a traditionalist regulator.
May we note that under the CBN’s 3-tiered Know-your-Customer Requirements, 2013,
that a bank account could be opened without a NIN (national identity number), telephone
number, BVN (bank verification number) and a valid identification subject to certain
transactional limits.
A roundabout manner of seeking to protect digital financial consumers in Nigeria will
include an organized plan of action aimed at digital financial literacy. Well informed DFS
45 Key Findings and Recommendations, Op. Cit. p.8.
46 Ibid
consumers will force FIs to comply to all their existing obligations and engender
financial inclusiveness.
CBN should take advantage of the provisions of BOFIA 2020 that allow CBN to perform
any aspects of its functions through 3rd parties that are not its employees to promote
digital financial literacy and consumer protection.
A multi-sectorial approach to protection of digital financial consumers may as well proof
more fruitful and relevant to Nigeria’s digital economy agenda.
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