Page 77 - ITU-T Focus Group Digital Financial Services – Recommendations

ITU-T Focus Group Digital Financial Services
Recommendations

Title of recommendation Liability of DFS providers for acts/omissions of agents
Working Group Consumer Experience and Protection

Theme Agents
Audience for recommendation Regulators

Regulation should specify explicitly that DFS providers are liable for the acts and omissions of their agents,
employees, and third party service providers (e.g., agent network managers, master agents, super agents, or
other distributors).

Regulation should stipulate that providers have clear guidelines for what is expected of agents and have
adequate monitoring systems to ensure agent compliance with policies. AFI states that DFS providers should
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ensure that appropriate standards are in place to select, manage, and train their agents. G20 High-Level
Principles on Financial Consumer Protection also state that financial service providers should be responsible
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and accountable for the actions of their authorized agents. While regulation should permit DFS providers to
enter into agreements with other entities (e.g., agent network managers, master agents, super agents, etc.)
to support their agent networks, the DFS provider itself maintains responsibility for: the actions of agents
and other outsourced service providers in delivering DFS; consumer outcomes related to DFS delivery; and
ensuring compliance of agents and the agent network with regulatory requirements and DFS provider policies
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and procedures. The GSMA Code of Conduct for Mobile Money Providers also states that mobile money
providers “shall assume responsibility for actions taken on their behalf by their agents (and any sub-agents)
under the provider-agent contract.”
Bangladesh, Brazil, Colombia, DRC, Ghana, India, Indonesia, Kenya, Nigeria, Pakistan, Peru, Rwanda, South Africa,
Tanzania, Uganda, and Zambia all have language that explicitly states that providers are either responsible or
liable for agent actions. Ghana, Kenya, Rwanda, and Tanzania also include more extensive language specifying
that providers are even responsible for actions that the provider may have specified as off limits in a contract.
For instance, Bank of Ghana’s Agent Guidelines read: “A standard agency agreement shall, at a minimum
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specify that the principal is wholly responsible and liable for all actions or omissions of agents providing services
on its behalf, even If said actions have not been authorized in the contract, as long as they relate to agency
business or matters connected therewith”. More commonly, regulations assign liability to both providers and
agents. For example, in South Africa regulations state, “If an employee or agent of a person is liable in terms
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of this Act …, the employer or principal is jointly and severally liable with that person”.
DFS providers should conduct regular or periodic checks on agents and conduct corrective actions as needed.
Regulations in Bangladesh, Ghana, India, Kenya, Lesotho, Malaysia, Nigeria, and Tanzania indicate that
regular or periodic checks on agents to ensure compliance with legal/regulatory requirements must occur. In
Bangladesh , for example, “The banks must formulate internal audit policy to monitor and control agents. They
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should visit the agent’s outlets at a regular interval to ensure that the agents are working in accordance with
the terms and conditions of the agreement and following the rules, regulations and guidelines issued by the
regulators.” However, beyond saying that they should be regular or periodic, none of the regulations specify
how often these checks should take place. Brazil, Colombia, Indonesia, Pakistan, Rwanda, Sierra Leone, South
Africa, and Uganda mandate that monitoring should take place, but regulations do not specifically require
regular checks. For instance, the Bank of Uganda states: “In its dealings with mobile money agents, a mobile
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26 Bank of Ghana, Agent Guidelines https:// www. bog. gov. gh/ privatecontent/ Banking/ AGENT%20 GUIDELINES%20 UPDATED3. pdf
27 Republic of South Africa, Consumer Protection Act (2008) http:// www. wipo. int/ edocs/ lexdocs/ laws/ en/ za/ za054en. pdf
28 Bank of Uganda, Mobile Money Guidelines (2013) https:// www. bou. or. ug/ opencms/ bou/ bou- downloads/ Financial_ Inclusion/
Mobile- Money- Guidelines- 2013. pdf

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