Are you aware of your rights as a financial consumer?

Every financial consumer should be aware that when you are dealing with Supervised Financial Institutions (SFIs), you should exercise your rights to the fullest extent possible.

Equally important is that these rights come with responsibilities.

Every discerning financial consumer is reminded that the Bank of Uganda (BOU) issued the Financial Consumer Protection Guidelines in 2011, that spell out the obligations of the SFIs, as well as the rights and responsibilities of the financial consumer.

These guidelines must be displayed in the banking halls to be easily accessed by the financial consumer.

On your part, once you are aware of your rights, you can easily access information about the products and services available, be confident when interacting with and choosing services that suit your needs, detect unfair practices and, where applicable, file a complaint if you feel aggrieved.

According to the guidelines, your rights as a financial consumer entail access to full information and advice before you choose a product or service from the SFIs. Moreover, this information should be in plain language to allow the consumer make an informed choice. For example, any financial consumer who has seen loan agreements knows how complicated the language is in such documents.

It is not unusual for the financial consumer to sign off agreements in haste because they are under pressure to get the loan funds. Nonetheless, to assist the consumer, BOU in 2015 introduced the Key Fact Documents (KFDs) for every chosen product or service that simplifies and summarises information in two pages. The KFDs entails information on fees, interest, benefits, as well as obligations.

As such, before you sign onto any product or service, your SFI must avail you with the KFDs to read and understand what you are signing up for. It is advisable to exercise patience and understand the process so that you avoid signing onto a product or service without gauging the implications on your personal finances.

Relatedly, when it comes to applying for a loan, it is important to note that you are entitled to a cooling off period. In this case, according to the guidelines, a consumer has the right to revoke or terminate an agreement within 10 working days after appending their signature. This should be done through a written notice delivered to the financial services provider.

However, you must take note that you have to pay some amount of the loan at the point of cancellation and, where applicable, some administration fees or charges incurred by your service provider before you exercise your cooling off right.

Another mistake that financial consumers make is allowing to act as guarantors for borrowers without weighing the financial implications.

You must be aware that once the borrower defaults on their loan, you will end up meeting their obligations if you acted as their guarantor. On their part, a financial service provider has a duty to advise the consumer the extent of the obligations prior to them acting as guarantors.

In line with the guidelines, the financial service provider has an obligation to put in place a mechanism to document, receive and handle consumer complaints.

These should be available at every branch, on their websites or any other communication channels that they use and these should be made known to financial consumers.

Once a consumer files a complaint, they should be kept informed about the steps being taken. Once the financial consumer is not satisfied with the way their issue has been handled, they can get in touch with BOU’s Financial Consumer Empowerment Mechanism by writing to fcem@bou.or.ug

Notably, all financial consumers should remember all their responsibilities when dealing with financial service providers. These include paying back the loans borrowed from a financial service provider.

In case you have difficulties paying, get in touch with your financial service provider immediately. Avoid disappearing acts.

More to that, the financial services provider must request customers to provide information on their updated postal address, physical address, e-mail and telephone numbers.

In conclusion, consumers need to empower themselves with information to allow them appreciate the rules of engagement with their financial service providerso that they can judge whether the product and service meets their needs.

The writer works with Bank of Uganda Personalfinance222@bou.or.ug