Excess and unauthorised charges by banks
That many banks short-change their customers and illegally profit there from is a renowned shame of Nigeria’s banking sector. The Central Bank of Nigeria (CBN), therefore, told Nigerians what they had always endured when it said the other day that banks imposed excess, illegal and unauthorised charges on their customers. It is, of course, a regime of cheating that must be stopped.
In year 2015 alone, CBN investigated ‘over 6000 complaints from banks’ customers and compelled banks ‘to refund the sum of over N6.2 billion to affected customers’. The apex bank however, failed to state the total amount claimed by customers, whether or not the affected customers were satisfied or not with the amount refunded and whether the culprit banks were sanctioned. Such information would have assisted in appreciating the convergence or divergence of what was claimed and what was refunded; the feelings of the claimant customers about the final outcome of their complaints, and CBN’s ‘resolve’ to continuously enforce the provisions of the Revised Guide to Bank Charges.
Of course, there have been many complaints by customers of banks about unauthorised and illegal charges. Such fleecing of the customers has become the rule rather than the exception. The excesses come under different descriptions such as management fees, processing fees, interest charges, commission on turnover, card maintenance fees, account maintenance fees, deposit, withdrawal and transfer telephone alert fees and ATM fees. Even the recently introduced stamp duty charge has become another source through which they have commenced overcharging their customers. In one transaction, some banks send more than two text message alerts and charge for each.
The banks, for reasons, such as greed, moral and professional bankruptcy, have often chosen to be the proverbial dogs eating the meat kept in their care. This has of necessity built distrust in the banks or the banking industry. This has had adverse implications for CBN’s programme of financial inclusion as well as the volume of money outside the banking system and effectiveness of monetary policy implementation.
CBN should, however, know that not everyone who has been fleeced by banks has complained or even has the capacity to complain to it. It is likely that those who complained are an insignificant number of those that have suffered in silence in the hands of banks. There might have been customers whose accounts witnessed high volume of transactions and excessively imposed with huge amount of charges. Customers who are monthly charged amounts as little as N40-N200 are unlikely to have complained. Yet being in the majority, given over 60 million bank customers in the system, the banks may have fleeced customers substantially. Equity and good practice demand that banks should either voluntarily refund what they have illegally taken from their customers or should be compelled to do so, whether affected customers have complained or not. If banks choose to wait until compelled, the CBN should, aside from the refund, impose deterrent sanctions against them. It is high time those who debase the noble banking profession and sabotage efforts aimed at financial inclusion were brought to book so that appropriate lessons may be taught.
It is equally important to emphasize the need for regulators in the banking and financial system to initiate enduring public awareness programmes that will build financial knowledge and literacy of consumers. For all that the CBN may believe, a large percentage of the banking public may be unaware of the Revised Guide to Bank Charges which specifies allowable charges for all banking services. Even if they know, its application may be a challenge for many. Such awareness programmes will enable the consumers to know when their banks are not being forthright with them and the steps they may take to protect themselves.
It is imperative to observe that the Consumer Protection Council (CPC), the government organ set up to protect consumers, seems not to have focused on the banking industry where consumers are daily crying out in anguish. It should wake up to its responsibilities or the quality and capacity of its leadership should be subjected to re-evaluation.
However, the responsibility of ensuring that CPC fulfils the expectations of the citizenry and works according to the law rests on the Ministry of Commerce and Industry. The time is ripe for the minister to take interest in the performance of the council in order to save innocent consumers of banking services from the excess-fee-charging banks.
While excess, illegal and unauthorised charges by banks should be seen as part of regulatory failure on one hand and impunity on another, it should also be classified as a serious financial crime by banks against their customers. This should not be allowed to continue.