Page 57 - ITU-T Focus Group Digital Financial Services – Consumer Experience and Protection

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

1 Introduction

The delivery of financial services through digital means has been lauded as a key ingredient for the rise in
financial inclusion numbers in many developing countries. Through this avenue, products and services such
as money transfer, credit, and insurance have become much more accessible to previously under-served
populations. As a prerequisite to enjoying these services, consumers are required to enter into contracts with
the relevant DFS providers in their markets. However, in some cases, these agreements may contain provisions
that are unfair or perilous for customers, putting them at risk of significant economic loss. More specifically,
contract clauses are sometimes: (1) unclear or difficult to understand, especially as they are usually written
in complex or technical language; (2) too onerous; (3) very lengthy; (4) have crucial terms missing; and (5) in
contravention of legislation or regulation. However, not all contract clauses are of concern. Some agreements
do try to incorporate provisions that protect consumers.
A total of 18 contracts were selected from 9 countries in Africa, namely: Ghana, Kenya, Malawi, Nigeria, South
Africa, Tanzania, Uganda, Zambia, and Zimbabwe.

These contracts were analysed along the following main themes:
• Language of agreement/transparency of communications

• Provider obligations
• Consumer obligations
• Dispute resolution/recourse.

This report summarises findings on these specific themes, across the 9 countries where contracts were
reviewed.

As part of the country-specific analysis, we have also set off in boxes examples of contract provisions which
appear to be in conflict with domestic legislation/regulation. While this analysis addresses potential compliance
issues, we caution that the final word on the legality of a contract clause must be decided by the appropriate
courts.

2 Key highlights

The country-specific analyses revealed some good practices and areas of concern, as discussed below.

2.1 Language of agreement & transparency of communications

The language used in all the contracts is English, which is not universally spoken in each country. In addition,
given literacy rates in some of the countries, which providers could be expected to know, significant portions
of the population will be unable to read the provisions. Even where the agreements can be read, given the
frequent use of complex legal language, the true implications of the agreements may not be fully understood.
See Box 1 for sample clauses from user agreements which may be considered in conflict with domestic legal
and regulatory requirements.
Another challenge that was identified by the review was regarding the length of contracts. A majority of the
agreements are several pages long. Studies from behavioural science demonstrate that consumers will not read
lengthy agreements. This raises the question whether there is truly a meeting of the minds when customers
enter into these agreements.

Fees and charges associated with transactions, including for money transfers, bill payment, interest on loans,
and USSD charges for transactions, are sometimes not disclosed in the agreements. Instead, customers are
referred to provider tariffs on websites or to publications that are available from other sources, including at

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