FLASHBACK: Banks exposed in major violations

The Central Bank released a report regarding the unprofessional conduct of banks that violates the regulator's guidelines on customer service.

The findings showed weaknesses in five areas, namely, board and management oversight of complaint handling function, unfair banking practices, disclosure and Transparency requirements, data protection, marketing and advertising, and ambiance.

Read the full story originally published on June 9, 2020, by thebftonline

The Bank of Ghana has released a report that reveals some banks are engaging in serious unprofessional conduct that violates the regulator’s guidelines on customer service and safety which should ensure customers have access to adequate redress that is fair, efficient, timely, and without cost to the complainant.

Between the periods of November 2019 to February 2020, according to the maiden on-site findings on eight banks carried out by the Market Conduct Examinations Office set up by the Bank of Ghana, there were issues that show lapses in the structures, systems, and processes in place to promote consumer protection and the early resolution of customer complaints and to generally assess compliance with relevant market conduct rules.

The findings showed weaknesses in five areas, namely, board and management oversight of complaint handling function, unfair banking practices, disclosure and Transparency requirements, data protection, marketing and advertising, and ambiance.

With regards to guidelines that were flouted by the board and management oversight of the complaint handling function, it was established that some banks’ Consumer Reporting Officers (CROs) were not submitting reports on customer complaints to the board, as there was no evidence of Board of Directors reviewing the CROs reports for policy directions.

Again, channels provided by banks to enable customers to lodge complaints such as SMS, website portal, and dedicated telephone lines, did not function; as well as under-reporting of complaint data to Bank of Ghana, and non-compliance with the regulator’s complaint resolution timelines.

Under unfair banking practices, the findings showed that customers’ savings accounts were charged for over-the-counter withdrawals below stipulated minimum amounts, and customers were automatically signed onto E-banking products and services and consequently charged without their explicit consent.

Another serious breach of customer trust by banks is changes made in terms and conditions of loan agreements which were implemented without the required period of prior notification to customers.

Then, under the disclosure and transparency requirement breaches, the findings reveal some borrowers were not provided with pre-agreement disclosure statements prior to the signing of loan agreements; while others were also not clearly informed of the requirement to submit their credit data to credit bureaus and to conduct credit search on them when taking loans.

There are still more, as the findings further reveal data protection breaches. Personal details taken from remittance customers were subsequently used for telemarketing promotional activities without the consent of the affected persons, and abandoned forms or slips used by customers for balance inquiries and other transactions were not properly disposed of, thereby, exposing customer personal details to third parties.

Again, on marketing and advertising, some of the banks investigated were unable to deliver on the marketing promise of disbursing certain loan facilities within 24 hours.

And with regards to the ambiance, some banking halls and ATMs were found to be inconvenient to the physically challenged. Besides that, the report adds, there were instances where hawking activities were allowed in front of some banking halls.

The regulator says it will continue to deploy all legal tools available to it to pursue its financial stability and consumer protection mandate, and persist in efforts to sensitize consumers on their rights and obligations in their dealings with licensed financial institutions.