Tuesday, 16 February 2016

Why Nigerians won’t transact business with their Banks on March 1ST – CAFON

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Sola Salako, Founder, CAFON

During a World Press Conference which held at Renneissance Hotel, Ikeja, Lagos-South West Nigeria on Monday February 15 (Yesterday), Consummer Advocacy of Nigeria (CAFON) under the leadership of Consumer Advocate Extra-ordinarie, Sola Salako presented some of the delibitating issues affecting relationship between industry operators in the Nigerian banking sector and millions of consummers who are daily cheated through unhealthy bank malpractices and under abhorrent conditions that has tilted growth in favor of practioners at the peril of consummers. 
A communique jointly signed by a conglomerate of Nigerian Consumer advocate bodies like Consumer Awareness Organisation (CAO), Consumers Empowerment Organisation of Nigeria (CEON),  and United Consumers Association (UCAN) among others agreed that on Monday March 1st , 2016 millions of Nigerians across the breadth and length of the country should declare a one day off banking activity protest titled “No-Banking Day”.
The communique which was obtained by your Africa’s number 1 Celebrity Encounter blog Asabeafrika is hereby published. Find out issues that makes Nigerian banks so corrupt and insensitive to the plights of millions of consummers and form your opinion. Enjoy!

Opening by Sola Salako, CEO, CAFON

Ladies and Gentlemen of the Press,
Good morning. On behalf of Consumer Advocacy Foundation of Nigeria CAFON and Market Ombudsman with active collaboration with the Coalition of Nigerian Consumer Protection Associations (CONCA) consisting of CAFON, CEON, CRP, CAO, UCAN, FODCOR, NATCOMMS, CRADO, and millions of aggrieved consumers who are the organizers, promoters and mobilizers of this protest, I thank you for honoring our invitation to this Press Conference.

Nigerian Banks & Her Cheating Track Record….
For many years now, consumers of banking services have been subjected to series of unsatisfactory services, transactions and contractual terms. We have endured excessive charges, unexplainable fees and unfair contracts that only protect the banks but do not protect the consumers. Banks debit consumers’ accounts at will for charges we never agreed to or were not aware of; they charge us for EVERYTHING; we pay to get our statements; introduction letters; debit cards, and now, some banks are charging N210 for the use of deposit and transfer forms in their branches! 
We have been victims of management and regulatory lapses resulting in many consumers losing their deposits in the banking crisis of the last two decades. Thousands of consumers have been victims of ATM fraud because the banking industry failed in its duty of care to educate and inform consumers of the inherent dangers in Online Banking at commencement.
Some consumers are still unable to access their deposits due to botched BVN registrations because the banks did not take time to properly educate consumers on the process before implementation. 

Sola Salako...'Nigerian Banks are only in business to dupe consummers'

Evil of Multiple Charges & Regime of Confussion @ CBN
CBN, the apex bank responsible for regulating the sector as well as protecting the consumer from exploitation is constantly changing policies without notice. Under the current CBN management, abolished fees are being reintroduced e.g. ATM withdrawals that was free 2 years ago, now cost N65 on 3rd withdrawals (many banks  even start charging from the first withdrawal!).
We pay N1000 (One Thousand Naira) for debit card issuance and renewals (this has just been increased by between N200-500 by some banks without any form of notice though it is free in many countries) and then there is an Annual Debit Card Maintenance Fee of N100 (One hundred Naira). 
Consumers really want to know how banks ‘maintain’ debit cards already issued to them? 
Even consumers who did not request for, or have never collected debit cards from some banks, are charged all these fees. On services they never used?
We pay N105 (Plus aditional N5) for every online transfer yet those same transactions were subjected to COT up until January 2016. Just when we were going to start enjoying zero fees on current accounts, CBN reintroduces COT under a new guise as “Monthly Account Maintenance Charge of N1. This charge was levied by default on ALL consumers without the chance to negotiate according to CBN directive. Why must consumers pay double charges on every transaction?
Bankers or Robbers?
Contrary to global understanding of the fact that a Savings Account is usually a no-fee account, banks in Nigeria now deduct various fees from consumer savings accounts!  How will consumers be encouraged to save money with the banks?
A new Stamp Duty charge of N50 on every credit of over N1000 (One Thousand Naira) has just been introduced. While we recognize the need for the FG to raise IGR in view of the current economic realities of our nation,  there are legal issues on the validity of this levy of N50 by Nigerian banks.   On our part, we question the fairness of a flat levy of N50 on deposits of N1000 (One Thousand Naira) or more. A student who receives an allowance of N2000 (Two Thousand Naira) pays the same amount as a rich man who receives a deposit of N10m!  (Ten  Million Naira) So the student is technically paying more taxes than the rich man. That is inequitable and unfair; thus requires an immediate review. 
 These incessant multiple charges are even more prevalent on loan accounts while  many banks have also taken advantage of CBN's fluctuating Forex policy to charge consumers exchange rates that far exceeds CBN rates without even notifying the consumers of the rates BEFORE the transaction. 

It is more frustrating because these same banks are doing little to support consumers and small businesses or SMEs by providing access to funds to help start ups businesses and expansion of such busineses. But they seem to have perfected the process of garnishing those hard earned monies deposited with them as charges for questionable services.

These and many more issues amount to excessive charges, unfair trade practices or clear exploitation thus creating additional burden on the consumer who is already groaning under a struggling economy. 

Consumers' Rights & CBN’s 419 tactics  
It is also disheartening that CBN, that should be protecting consumers from undue exploitation, appears to be more sympathetic to the banks at the detriment of the vulnerable consumers, in view of its recent policies on bank charges. Consumers therefore, have no other choice but to insist on our rights which include but are not limited to: 

1. The right to choose - it appears that the banking sector is operating a price fixing cartel called the Bankers Committee superintended by the CBN where they determine how much to charge for what! When consumers challenge any questionable fees, the banks are quick to say it is as approved by CBN! Whose interest should CBN be protecting, the banks making profit or the consumers trying to make a living? How can consumers choose between banks when prices are already fixed by regulator’s fiat? 

2. The right to fair and equitable fees - while we recognize that banks have the right to get paid for services rendered, such fees must be verifiable, fair and commensurate to services provided. Multiple charges for a single transaction, excessive charges of a percentage of transaction volume and unexplained arbitrary deductions from consumer's accounts are neither fair nor equitable.

3.  The right to detailed and adequate information about services, charges and fees BEFORE they are applied - every commercial contract presumes the consent of two or more parties to clearly stated terms, charges and conditions but this is not the case in banking transactions in Nigeria.  
The consumer rarely gets adequate information about terms, conditions or the bouquet of charges associated with particular services until AFTER the fact! Rather, the bank hides under a blanket legal clause included in fine print on its contracts, by which they get unfettered access to consumer funds to deduct any and all fees the bank deems is owed to it, irrespective of whether the charges are known, consented to or are disputed by the consumer. That is a gross breach of trust. 

4.  The right to effective redress when dissatisfied with the service or charges on any transaction - consumers want their complaints resolved promptly, satisfactorily and responsibly but the banks do not seem to have made adequate provision to address  this. Many times, the process of redress is deliberately tedious, stressful and unproductive so consumer complaints are unresolved for months or years until the consumer abandons the issue. 

The Cause & Call for 1\3\16
In view of the aforementioned, as well as a myriad of consumer complaints we receive daily from frustrated and angry customers who feel cheated, disrespected, exploited and helpless because there are no clear structures for genuine resolution of their complaints, our organizations have had no choice but to call on all consumers to commence a series of consumer resistance actions against ALL banks starting with the  passive protest on  Tuesday March 1st, 2016 tagged #NoBankingDay.

What is #NoBankingDay?
#NoBankingDay is a passive, nationwide consumer action whereby aggrieved consumers avoid ALL banking services on March 1st in protest against Excessive Bank Charges. 

On March 1st 2016, consumers should abide by the following:

·      .Don't visit any banking hall 
·       Don't use your ATM cards.
·       Don’t log in to any online banking 
·       Don't  transfer any money from your phones, tablets, or laptops.
·       Don’t make any POS or online payments. 
·       Don’t issue or present any cheques dated 01 March, 2016.
·       Avoid doing any banking transactions on 01 March 2016 as much as possible 

Why #NoBankingDay? 
To remind the banks that they are in business because we patronize them therefore, we deserve good, fair and equitable services and charges.
To deny all banks the income they would have made from the excessive, multiple and sometimes questionable charges they deduct from consumer accounts for JUST ONE DAY! After all, If consumers don’t do any transactions, then they cannot charge any fees. 

Who can participate?
All consumers of banking services in Nigeria who believe they deserve better,  especially those affected by multiple bank charges. 

Will it disrupt individual plans? 
Not if you plan adequately. Most consumers don’t go to the bank every day so we can all make a deliberate decision to make March 1st one of those "no banking days". Consumers can do all transactions, on February 29th or postpone it to March 2nd 2016. Since it is just for 24 hours, there is no need to keep excess cash at home for security reasons. 

What if CBN/Banks don’t respond? 
The #NoBankingDay Protest is not a Dash; it is a Marathon. We have absolute faith in the efficacy of Collective Consumer Power to influence policy, correct erring service providers and restore the balance of justice and equity in the marketplace. The Change we all seek only happens when majority of consumers rise up to make their voices heard. This protest is the voice of the Nigerian consumer saying Enough is Enough! to excessive charges in the banking sector. We are optimistic that the necessary authorities will respond to the voice of their consumers. 

A Letter of Protest will be sent to the CBN Governor after the Town Hall Meeting on #NoBankingDay on our demands. We are also actively soliciting for the support and participation of more civil society organizations, labour groups, student unions, organized private sector and trade unions to join this protest as the issue of excessive bank charges affect everyone.

This action is thus the first in a series of Consumer Resistance Actions planned to press home to the CBN and Banking Institutions that we are serious and dedicated to achieving our demands; top of which is for a review and curb of the excesses in the sector. 

Our Demands 

We want the CBN and Banks to: 
1) Review all charges to ensure they are justifiable, clear and communicated to consumers. Banks must state ALL fees and charges payable BEFORE every service. Fees not stated must not be chargeable.

2) Eliminate ALL multiple charges e.g. Online transactions should not attract both N105 (Plus N5) and N1/Mille. That is multiple charging. 

3) Include better protection for consumers in the forms, contracts and documents consumers sign. Generic clauses that give banks unlimited access to consumer funds without further consent should be abolished. 

4) Review the Stamp Duty levy to be more equitable and just. A deposit transaction of N1000 attracts the same duty of N50 as a transaction of N100,000,000. The poor is paying more in ratio than the rich. 

5) Revert to the original plan of 2016 zero COT policy on current accounts and  cancel fees on debit card 'maintenance'.

6) Create a platform for regular dialogue with consumers to provide an opportunity to negotiate terms and conditions of contracts and services. Consumers should be included in the policy deliberations of the CBN and banks to ensure better consumer friendly decisions.

 No Act or Intent at Sabotage
Let us place on record that the #NoBankingDay protest has NO sinister political, social or economic agenda. It is purely a consumer pressure activity seeking balance in the ecosystem of the banking industry to relieve consumers of unfair charges. 

How can Consumers support #NoBankingDay?       
To show support and help create maximum awareness, we encourage consumers to

- Start the conversation. Talk to family and friends to join the protest.
- Call in to Radio and TV programmes to raise the issue of excessive bank charges and talk about #NoBankingDay
- Sign the petition online at this link 

- Go to Consumer Advocacy Foundation of Nigeria CAFON on Facebook, Instagram or Twitter


Ladies and Gentlemen of the Press, we seek your support for a worthy cause that impacts the lives of every Nigerian directly or indirectly. An equitable, supportive and trustworthy banking system is what our country needs to facilitate the economic growth we need in this trying times. Our banking industry cannot continue to erode consumer confidence for the sake of declaring profits which are not reflective of the level of productivity in the economy.

In view of these issues, many consumers have started to conduct their business transactions sans the banking system. This is not good for an economy that is still trying to deal with a significant percentage of unbanked citizens.  The banking industry must not be the ONLY profitable sector simply because it has access to the hard earned funds of the other sectors. It must add value. 

 In 2015 alone, Estimated Total banks profit after tax is N878.67billion while total assets hits N47.17trillion, according to Businessday Banking Sector Outlook published 12/2/16. We must ask the question "How much of these profits did they make from excessive and multiple charges daily?” 

Must banks fleece millions of Nigerians in order to declare profits for less than 5% of us who are shareholders? 

How are the banks contributing to the real sector? How have they helped Nigerian Entrepreneurs to be productive? 

Huge sector profits are welcome as long as it is earned legitimately. But when a sector's  "earnings" consist of multiple charges for one service, or unauthorized deduction from customer funds just because it have access to it, that is abuse of trust! 

It's time for consumers to say NO to excessive bank charges! Join our consumer protest....#NoBankingDay on Tuesday March 1st 2016.

Thank you for listening 

Sola Salako (Ms) 

Market Ombusdman
Consumer Awareness Organisation (CAO)
Plot 1123, ECA Moneke Crescent,
Corridor Layout, Opposite Maryland Estate, Enugu
Foundation for Defence of Consumer Rights (FODCOR)
Royal Shopping Mall, Suite 202, No.64 First-East Circular Road, Benin City, Edo State

Consumers Empowerment Organisation of Nigeria (CEON)
97, Ondo-Benin Road, Ijebu-Ode, Ogun State

Consumer Advocacy Foundation of Nigeria (CAFON)
 29B, Olorunnimbe Street, WEMABOD Estate, 
offAdeniyi Jones, Ikeja, Lagos 

United Consumers Association (UCAN)
104, Oloto Ring Road, Oto-Ijanikin, Lagos

Consumer Campaign Foundation (CCF)
16, Dipeolu Street, Ikeja, Lagos

Consumer Rights Project (CRP)
15, Osolo Way, Ajao Estate, Lagos

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