“Free for Consumers”: CBN Issues New Directive to Banks on Advertisement Policy
- The Central Bank of Nigeria has ordered banks to follow new guides when advertising and promoting materials
- Part of the guideline includes refraining from mentioning unaudited financial statements in their sales promotion
- It stated that these modifications will increase consumer options, accessibility, and convenience
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The Central Bank of Nigeria has instructed financial service providers, including banks, to adhere to essential criteria in their advertising and promotional materials as part of its recently updated consumer protection framework.
Source: UGC
An essential prerequisite is that providers refrain from mentioning unaudited financial statements in their sales promotion. The Punch reported that they are also expected to provide free advertisements to customers.
Other requirements include providing the regulatory body's contact information, revealing the cost of the products, including all fees and other related charges, describing the nature and value of benefits when an advertisement mentions or links to other value-adding benefits, and refraining from naming or equating products with those of competitors.
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The CBN noted:
“The content of advertisements shall be factual, unambiguous, not offensive, misleading, deceptive, or likely to cause damage.
“Promotional materials must not focus on benefits and downplay risks, unsolicited advertisements should be free for consumers."
In addition, the service providers are expected to honour obligations in sales promotions as advertised and offered, not make opting-in for promotional materials a prerequisite for onboarding consumers to products.
It added:
“They must also establish a process to periodically evaluate the competence and conduct of employees.”
“The financial services industry has undergone significant transformation with evolving market trends, proliferation and widespread adoption of technology in the delivery of a broad range of financial products and services through digital channels.”
While these changes are expected to improve consumer options, convenience, and accessibility, the apex bank noted that they will expose consumers to new challenges and risks.
Changes to improve banks' offerings
The apex bank further stated that the updated document encourages transparency and disclosure by giving customers timely access to precise and clear information.
This will foster a secure, reliable, and consumer-friendly financial services environment.
Legit.ng earlier reported that the apex bank called out some commercial banks on social media, specifically X, for neglecting customers' complaints.
This is because many of the banks' customers took to social media to ask the CBN to compel them to refund the monies debited from their accounts.
To attract more people into the financial system, the CBN also directed banks to raise the quality of their products and services.
CBN moves to protect banks' customers
Legit.ng reported the CBN has instructed Nigerian financial institutions to display their corporate names on all their online business platforms, which includes websites, portals, and mobile apps.
The directive affects banks, payment service providers, and international money transfer operators.
The CBN gave the directive in a circular signed by Haruna Mustafa, the CBN's financial policy and regulation director additional.
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Source: Legit.ng
