Page 67 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Summaries of key terms and conditions of DFS contracts in simple language
Working Group Consumer Experience and Protection

Theme Contracts/Disclosures
Audience for recommendation Regulators

Regulators should require DFS providers to provide summaries of key terms and conditions in simple language
both at the beginning of the contract and through other means easily accessible to customers, such as via SMS.
These summaries should include core information necessary for DFS consumers such as:
i. all prices and fees, using definitions established by regulator (see separate recommendation)
ii. the provider that is ultimately responsible for the service (e.g. if a bank is providing a service via a mobile
money channel, then the bank’s role is clearly disclosed);
iii. limitations, if any, on the consumer’s ability to cash out;
iv. any explicit obligations of the customers (e.g. to maintain PIN secrecy);
v. under which circumstances the consumer bears the risk of loss and the provider not liable (e.g. when fraud
results from a consumer giving out PIN);
vi. where and how to complain if the consumer has a problem;
vii. for credit products, relevant interest rates, as well as all delinquency and default penalties.

In the CEP Working Group’s review of 18 user agreements from nine different countries, key information such
as pricing, who bears risk of loss and under which circumstances, and where and how to complain, were often
missing from the consumer agreements. If these essential terms and conditions are missing from the user
agreement, what will the default protocol be? Consumers are left to wonder, or worse, find out that adverse
consequences apply when such an unanticipated event occurs.

The U.S. legislature determined that there are certain key terms and conditions that must not only be
communicated to consumers about credit cards, but should be highlighted by displaying it in a box at the
outset of the consumer’s agreement. This box was named the Schumer Box after the Senator who proposed
the legislation and it contains rates, fees, and other key points as required under the U.S. Truth in Lending
Act. Further, the font size for these disclosures must be 18-point or greater and remaining terms in at least
12-point type.
DFS regulators should consider which terms and conditions they consider critical and important enough to
be highlighted to the consumer prior to contracting and consider ways to make these disclosures prominent.
Space constraints on mobile devices may be an issue, but still the most important terms and conditions should
be listed in a simple, concise manner.

The working group considered the above seven key facts to be of primary importance such that they should
be communicated to the DFS consumer in a prominent summary, set off and distinguished from the full user
agreement.

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