Promote Consumer Financial Protection .Gov’ts Told

By Samuel Boadi

Consumers International (CI) has urged governments all over the world to ensure fair consumer financial protection for their citizenry.
The recommendations, which form part of this year’s World Consumer Rights Day on March 15, are in response to the G20 commitment to address consumer protection in financial services at the Seoul Summit in November 2010, where CI and consumer organisations from G20 and non-G20 countries fervently campaigned.
CI, in a recent press release, said the launch of the recommendations will take place on May 21, this year.
Joost Martens, Director General of Consumers International, said: “There are as many bank accounts in the world as there are adults and 150 million new consumers join the market for financial services every year. Yet consumers around the world – in both rich and poor countries – are continuing to get a raw deal from banks and other financial service providers.
“These ground-breaking recommendations are the product of a shared sense of anger within the consumer movement that the rights of financial consumers have been neglected for too long. They provide a clear and comprehensive set of demands to significantly improve financial protection for consumers everywhere.”
The report, ‘Safe, fair and competitive markets for financial services: recommendations for the G20 on the enhancement of consumer protection in financial services,” calls for a new international organisation to support work on financial consumer protection.
It called for a permanent international organisation to enable national financial consumer protection bodies to share good practice, issue public alerts and develop minimum standards and guidelines.
It appealed to national regulators with full authority to investigate, halt and remedy violations of consumer protection law, including the right to define specific practices or products as unfair, deceptive or otherwise illegal.
Calling for clearer contracts, charges and practices, it said regulators should introduce a requirement of comprehensibility to remove from the market products that do not meet minimum standards. Again, it said financial advice to consumers should be separated from sales-based remuneration.
On effective redress and dispute resolution, the report said consumers should have access to adequate individual and collective redress systems.
It also touched on measures to promote stability and safety of consumers’ deposits and investments, including separation of investment and retail banking divisions, bank ‘living wills’ with guarantees for protecting consumer deposits, and reform of insolvency procedures to change the rank of creditors to put depositors at the top.
The report called for competition in financial services to help reverse the market concentration, which has contributed to the creation of institutions that are 'too big to fail' and also remove barriers that discourage consumers from switching accounts.
It said financial service providers should be asked to take more responsibility of ensuring consumers receive clear, sufficient, reliable, comparable and timely information about financial service products.
According to James Guest, CI’s Vice President and CEO of Consumers Union of the United States, “The 2008 collapse of the US sub-prime mortgage market was the starting point for what became the biggest financial crisis since the Great Depression. This crisis started with a failure of financial consumer protection and implementing CI’s recommendations will be a major step towards preventing such a catastrophe from ever happening again.
“Weak consumer protection in financial services is an unnecessary risk with disastrous consequences we cannot afford to repeat. We call on governments to pay urgent attention to the consumer movement’s demands.”
World Consumer Rights Day is an international day of action and awareness, observed by consumer organisations and civil rights groups around the world.
President John F. Kennedy on 15 March, told the US Congress: “Consumers by definition, include us all. They are the largest economic group, affecting and affected by almost every public and private economic decision, yet they are the only important group, whose views are often not heard.”

Where Are The Rights Of Ghanaian Consumers?

Not many Ghanaian consumers can tell of a time when they successfully sought redress from the courts of law on a product (both local and foreign), which they bought from the market that later proved to be substandard or fake.
There is currently no Consumer Rights Law to protect consumers, hence the exploitation of a lot of consumers in Ghana by some manufacturers. SAMUEL BOADI looks into this matter.

Asana Awudu lives at Abuja, a shanty settlement behind the Cocoa Marketing Board (CMB) offices at Accra Central.
The 30-year-old mother of two migrated from her hometown at Nyankpala in the Northern Region to look for greener pastures in Accra two years ago.
She cannot see anymore because an oil ointment she bought from a drug hawker to treat an eye infection has left her totally blind.
All efforts to help her regain her sight have proved futile and she cannot trace the one she bought the eye ointment from.
She used to sell fritters every morning in a glass container, which she carried on her head, and she was able to remit her two children in the village every month since her children’s dads had totally abandoned them.
Now she is a roving beggar on the streets of Accra perpetually impoverished because she cannot see.
As part of efforts to forestall such situations and educate consumers on what to look out for in products that the Ghana Standards Board (GSB), with support from a few corporate organizations, marked the International Day of the Consumer yesterday, March 15, 2011 in Accra.
Speaking to CITY & BUSINESS GUIDE in a telephone interview, Amponsah-Bediako, Public Relations Manager of GSB, said a lot of consumers in Ghana stand the risk of purchasing substandard products if they shop recklessly.
According to him, this was necessary because a lot of products in Ghana were manufactured in obscure places.
Noting that a good number of products also meet GSB’s required standards, he appealed to consumers to look out for the name and address of the manufacturer of any product they buy on the market, as well as the country of origin so that the manufacturers could easily be traced.
“The inscription should be in English including the manufacturing and expiry dates other than that users would find it difficult to understand how to use a particular product.
Consumers should also check the net content, volume and weight of products, the list of ingredients, especially for food and drugs and additionally pay attention to the energy efficiency ratings (capacity) of electrical appliances they buy.”
Calling on the national regulatory bodies such as the National Petroleum Authority (NPA), Food & Drugs Board (FDB), Energy Commision, among others to collaborate with GSB to educate consumers on their rights, Mr Amponsah Bediako said no headway would be made if consumers fail to pay particular attention to attributes of products.
Odame Darkwa, Deputy CEO, Food Division of the FDB, asked consumers to critically examine both local and foreign products they buy from the market.
“In the case of canned foods for example, consumers should always look out for the nature of packaging as to whether the cans have rusted, bloated or with defaced labels.”
He further tasked consumers to look out for substances they are allergic to so that they are not exposed to any health hazards.
“Consumers should therefore be careful, especially people who buy from vendors carrying food on their heads by the roadside. Most of these vendors do not have any means of refrigeration and thus exposes foods to a lot of infections.
Of special concern is sachet water. Most of the sellers look very unkempt and sell by gutters.”
Kofi Kapito, Executive Secretary of Consumer Protection Agency, also complained about the rate at which some embassies in Accra exploit Ghanaian visa applicants.
“The American and British Embassies have taken undue advantage of applicants in that when people apply for visas, they are denied the visas on flimsy excuses and their monies are not refunded to them. How can the mere processing of documents cost about $100? There is no place in the United States that the processing of visa costs this much.”
He said government needs to put measures in place to prevent telecommunications companies from exploiting consumers.
“These telecoms operators deceive consumers with a lot of messages and ask phone users to text messages to certain codes for prizes. It is the NCA that should do these things but appear to be in bed with these companies, hence the massive exploitation.”
Mr Kapito therefore called on government to speed up work on the preparation of the Consumer Rights Law to help fight manufacturers of products and services, who unduly take advantage of the Ghanaian consumer and walk away scot-free.
“Most Ghanaian consumers have had nowhere to take their concerns to particularly when their rights are being abused. When the Consumer Rights Law comes into force, there would be some sanity in the system,” Mr Kapito stressed.