Information is power

By Sylvia Juuko

WEEK'S TOPIC: You can only make the right choices if you have the right information

For a number of people, 2012 was characterized by a constant cash squeeze. If you are likely to stay in the same income bracket in 2013, you need to do a number of things differently to ensure you get value for money.

It’s in your interest to get as much information about the products and services you procure. This is your right and responsibility as a financial consumer.

You may consider making use of the Bank of Uganda (BoU) Financial Consumer Protection Guidelines 2011 that are applicable to all financial institutions regulated by the Bank.

When you get acquainted with these guidelines you will discover that a financial service provider has a duty to treat you fairly.

Prior to taking on a product or service, your financial institution has to furnish you with information to give you a clear understanding of your responsibilities and duties.

For instance, you should be apprised of the features of the different products and services of interest in plain language. You have a right to ask questions if you have some doubts or don’t understand the different aspects.

In turn, the service provider has the right to ask you to provide information to determine your eligibility.

When you opt for a product or service, you should be given a key facts document and a copy of terms and conditions.

Regarding interest rate, your financial institutions has a responsibility to disclose the term of the fixed deposit or loan as well as whether the interest is fixed or variable.

You should also be told of the charges, fees or additional interest that you may incur if you decide to terminate the contract early.

According to these guidelines, you are entitled to a cooling off period. This means that within ten working days after signing a contract for a product or service, you can revoke or terminate it through a written notice which is delivered to your financial institution.

However, this can only be effective if you repay the loan in full at time of cancellation including any administration charge or fee that has been incurred by the financial institution. This charge, according to the guidelines, shouldn’t exceed 5% of the value of a loan.

You should get a statement detailing the transactions over a given period, preferably monthly. Unfortunately a number of people do not bother to request for this statement in case the banks don’t provide them. However, if you request for a statement beyond the monthly one you are entitled to, you may have to pay for it.

You are entitled to a notification of at least 30 days in advance before your institution effects changes in the terms and conditions, fees or charges or relocation of premises.

In the unfortunate event of being aggrieved, your service provider is required to operate appropriate and effective procedures for receiving complaints. In addition, information about these procedures must be availed to the consumer.

As a consumer, you should know that you have to take responsibility for the decision to acquire a service/product. For example if you take out a loan, it’s your responsibility to get information, read and understand the fine print before you commit your signature. You equally have an obligation to repay the loan you have taken from your service provider.

The writer works with Bank of Uganda