Page 14 - ITU-T Focus Group Digital Financial Services – Consumer Experience and Protection

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

Table 1: Information and transparency

Key Issues Examples

1. TRANSPARENCY OF FEES Full disclosure of all fees and charges is provided prior to a transaction.
Ideally fees are disclosed in multiple formats (in brochure, verbally, on
website etc.)

2. KEY FACTS OR SUMMARY Standardized key fact documents can enable providers to give consumers
DOCUMENT the key information related to the service or product concisely and in local
language.

3. TERMS AND CONDITIONS ARE Full disclosure of terms and conditions of contract is made prior to the
TRANSPARENT customer initiating use of the services. Unclear terms or complicated
sentences are avoided so that they are as easy to understand as possible.
T&Cs are available in common local languages. Simplified contracts and
standard form contracts also enable simplified disclosure of terms and
conditions to customers.
4. COOLING OFF PERIOD Cooling off period is available to consumers so that if they change their
mind on a product/service within x weeks and terminate a contract with-
out facing penalties.

5. NOTICE PERIOD FOR CHANGES TO There is an adequate time given to consumers by the providers before any
T&CS, FEES changes to fees or terms and conditions come in effect.

8. MISLEADING ADVERTISEMENTS AND
SALES PROMOTIONS ARE PROHIBITED Advertisements which are misleading are prohibited. Ideally advertise-
ments should use plain and simple language

9. POLICY ON DORMANT ACCOUNTS Clear policies over when an account is considered dormant and what hap-
pens to the funds are effectively communicated to the consumers.

3.2 Dispute Resolution

As the DFS ecosystem continues to expand with more services and products available to consumers, it becomes
increasingly essential to have effective recourse mechanisms in place. Principle 9 of the G20 High Level
Principles on Financial Consumer Protection states that access to redress should be ‘accessible, affordable,
independent, fair, accountable, timely and efficient.’ (World Bank, 2014, p. 27). Effective dispute resolution is
even more important for DFS users who were previously unbanked and are new to formal financial services as
it can help consumers in overcoming challenges related to adoption and trust (Mazer & Garg, 2015; Chapman
& Mazer, 2013). Evidence of this was found in a study of M-Pesa in Kenya where the ability to receive effective
dispute resolution led to increased trust and loyalty which had a positive effect on increasing customer uptake
of the services (Collins and Zollman 2011 cited in Chapman & Mazer, 2013).
Effective dispute resolutions are not only important in improving trust and adoption for consumers but the
wealth of information which can be collected and analysed offers an opportunity to improve products and
services. For example in Pakistan, Tameer Microfinance Bank used data collected from complaints to identify
the consumers who have a higher default risk and subsequently were able to target these consumers with
more assistance (Chapman & Mazer, 2013).

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