Page 13 - ITU-T Focus Group Digital Financial Services – Consumer Experience and Protection

ITU-T Focus Group Digital Financial Services
Consumer Experience and Protection

Consumers can experience a number of potential risks when conducting DFS transactions. Fraud is an example
of the various forms these risks can take. For example, DFS provider employees, may gain access to consumer
accounts and use the private information for dishonest purposes, or fraudsters may use social engineering
scams to obtain money or information from unsuspecting customers. Consumers can also experience fraud
from agents, who could charge them unauthorized fees, or access private customer information including
their PINs.

The DFS provider is the entity which is actually providing the service to the consumer and is ultimately
responsible for ensuring transparent, fair, and safe services and protecting the consumer’s funds and personal
information. For instance, clear terms and conditions in the DFS service contract explaining the consumer
rights and obligations, clear explanation of fees charged to consumers, the availability of timely complaint
mechanisms and dispute resolution process reduces risk while enhancing consumer trust in using DFS. The
liability of consumers, agents and DFS providers in case of errors is also an important part of transparency.

Four core themes were identified as central to consumer protection in order to mitigate the risks for consumers.
1 Provision of information and transparency

2 Dispute resolution
3 Fraud prevention
4 Data privacy and protection

Each of these areas of focus are now considered in more detail.

3.1 Provision of Information and Transparency
Providing consumers with information and transparency in all digital financial services and products is crucial
to develop trust and uptake. Absence of information is likely to result in consumer lack of knowledge and
awareness on key product features, terms and conditions, which heightens the risk to consumers. To counter
this, ‘clear, adequate, accurate and complete information’ should be provided to all users (AFI, 2014, p. 6).

It is vital that providers are transparent about their services and products so that consumers have the
opportunity to make informed choices and avoid risks such as agent misconduct, overcharging or misleading
advertisements and scams (McKee, Kaffenberger, & Zimmerman, 2015; World Bank, 2014). Collaborative
research undertaken by MicroSave, CGAP and BFA in four countries (Uganda, the Philippines, Bangladesh and
Colombia) found that unclear pricing was seen as a high risk by consumers (Malady, 2015).

In addition to providers delivering transparent and accurate information it is essential that consumers are
able to understand the information provided to them in order to increase their capabilities and empower
consumers to make informed choices.

The key issues in information and ensuring transparency are detailed below:

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