The Responsibilities of the Consumer / Customer when Using Financial Products

An age-old mantra, 'Customer is King' is every consumer's favourite expression in the marketplace, yet we often overlook our duties and responsibilities as consumers. The question that comes to mind is, does this mean that it is only customers who have rights and privileges without any corresponding responsibilities? In this article, we attempt to discuss this question in detail.

In December 2021, the Central Bank of Eswatini (CBE) published an article explaining the rights a consumer has in the bank-consumer relationship. This article follows up on that article as it addresses the responsibilities the consumer has in the bank-consumer relationship as outlined in several standing Eswatini regulatory frameworks.

Responsibilities of Consumers

Responsibility to provide the financial institution with accurate, up-to-date information

It is your responsibility as a consumer to provide your bank with the latest and accurate information. Section 25(1) of the Consumer Credit Act (CCA), 2016 (as amended) states that the consumer shall 'fully and truthfully' answer any requests for information by the financial institution. If anything changes in your circumstances, it is your responsibility as a consumer to timely inform your bank. This could be a change in your financial status, a change of location, or a change in any of the documents submitted as "Know-Your-Customer" (KYC) documents.

Responsibility to meet financial obligations

As a consumer, you also have a responsibility to meet your financial obligations. An example is Bank A has given you a loan and the agreement is that you will repay the loan at E3000 monthly instalments. It is your responsibility as a consumer to ensure that Bank A consistently receives E3000 per month as agreed, until the loan is cleared. If you have set up a stop order for this monthly repayment, it is your duty to check that the stop order payment is deducted by reviewing transactions in your bank statement. The consumer also has responsibility to take prompt action when they discover that they may end up not being able to meet this financial obligation. For example, Section 55 (1) of the CCA states that the consumer can request to reduce his credit limit under a credit facility.

Responsibility to protect financial information

It is also your responsibility as a consumer to ensure that you protect all your financial information and that only individuals with your approval have access to such information. This includes protecting your Personal Identification Number (PIN), access codes and payment cards, passwords, storing your statements in a safe environment, etc. This also includes making sure that when you dispose of any information, it is discarded correctly.

Responsibility to report unethical, fraudulent practices/ misconduct

It is your responsibility as a consumer to report unethical practices, fraud or errors that occur in your dealings with your bank. For instance, Section 48 of the CCA, 2016 (as amended) stipulates that it is the customer's responsibility to provide written notice to a credit provider where the customer disputes a particular credit or debit in a credit agreement. It is also your duty to report any form of misconduct by bank employees. It is your responsibility to ensure that you follow the redress mechanisms in place. First you must report to your bank and if your bank does not address the complaint or you are not satisfied with the response, then you could escalate the complaint to CBE's Ombudsman at [email protected].

Responsibility to deal with only licensed financial institutions

It is also your responsibility to ensure that as a consumer, you only deal with licensed financial institutions. Consumers can go to the websites of the Central Bank and Financial Services Regulatory Authority (Regulators) to see a list of licensed financial institutions. Where a consumer is not sure about the status of an entity, he/she contemplates dealing with, it is their responsibility to undertake the necessary due diligence, including making an inquiry with the Regulators.

Responsibility to self-educate

The consumer has a responsibility to educate themselves to appropriately manage their financial affairs and make informed financial decisions. This could be through conducting research across different platforms and on different topics to improve one's financial literacy. The consumer should ensure that they obtain information from credible sources. This information could be for education purposes, or when a consumer desires to know more about a specific financial product before using it. Credible sources include bank officials, bank websites and Regulators' websites, or the Eswatini Finance website, found on this link http://eswatinifinance.org/. This consumer education website has several different topics which a consumer can read through.

Once you improve your financial literacy and competency as a customer, you can further negotiate for better terms for yourself. For instance, Mrs. Simelane wants to take a loan and is aware that she can only pay back E5000 per month when considering other monthly expenses. In understanding her financial status and monthly obligations, Mrs. Simelane could negotiate for a longer repayment period to meet monthly repayments and other living expenses.

Responsibility to seek clarity

It is the consumer's responsibility to ensure that they seek clarity when "buying" a financial product. For instance, Mrs. Simelane wants to open a savings account at Bank A and Bank A offers many savings accounts with different benefits. It is Mrs. Simelane's responsibility to ask for clarity on the key terms, conditions and benefits of each one of the savings accounts. The customer can also request the Key Facts Statement for the account which she can use to compare with products offered by other banks.

It is clear then, that even though consumers have rights, every right granted to the consumer has a corresponding responsibility. It is therefore crucial for consumers to know their responsibilities. The Central Bank of Eswatini (CBE) remains committed to improve consumers' financial literacy so that consumers could appreciate their responsibilities through the Bank's consumer empowerment initiatives.

Please note that all previously published articles can be found on the Central Bank of Eswatini website www.centralbank.org.sz and social media pages.

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