‘We are asking Nigerian banks to review their  charges, dialogue with customers’

Many Nigerian bank customers have over the years been groaning under the weight of a plethora of charges imposed on them by their banks. The weight of the burden seems to have been aggravated by the recent introduction of N50 stamp duty for all transactions above N1,000 as well as some new charges under different names. To protest against these charges, some consumer protection rights groups in the country, led by Consumer Advocacy Foundation of Nigeria (CAFON), have declared March 1, 2016 a ‘No Banking Day’. Sola Salako, a well-known consumer rights activist and founder of CAFON, in this interview with FRANK ELEANYA explains the idea behind the ‘No Banking Day’ protest and why there is need for a review of the contract terms between the banks and their customers.

We gather that your foundation, the Consumer Advocacy Foundation of Nigeria, and other consumer rights groups in the country are planning a ‘No Banking Day’ for March 1. Could you tell us the idea behind this protest?
The ‘No Banking Day’ is a passive consumer protest against excessive bank charges that consumers have started to experience. In recent times there have been new or revised charges that followed each other incessantly and alarmed a lot of customers. Before now, they would dump it in there once every six months and you don’t really pay too much attention. But between December and January we’ve just had a plethora of charges. First, it started with annual debit card maintenance charge of N100. A lot of consumers sent me complaints on that, asking how banks maintain the card that has been with the customers.
We raised a petition against one bank, GTB, because I bank with them and I got that alert too. Everybody signed on. We got to speak with GTB to ask them at what point they informed the customers that there was an annual N100 maintenance charge. They said the CBN gave them the right to charge. We said to them: Because the CBN gave you the right to charge means I don’t have a right to know what my commitments are? It is a contract. There should be a statement of what those charges include. I must be aware of these charges. If those charges are clear at the time I was signing the contract, they should be tabulated in the contract, but if they are not there at the point of the contract, you should notify me. You don’t assume because the CBN has given you the right to charge it so you can go ahead and charge it without notifying me. That’s an abuse of trust. It’s because you have access to my money. If you don’t have access to my money when that charge is due, you will notify me that charge is due and ask me to please pay. But because you have access to my money, you just go in there and take it out and say there was a blanket clause that most consumers don’t even understand.
We started thinking of the possibility of suing and we discovered that the laws were everywhere – not coordinated. While we were still trying to grapple with how to make them talk to us, the N50 stamp duty came. In the mind it might be too small but just calculate N50 for about a million people. That’s how these banks declare their profits.
We got into January and while we were expecting that COT will cease in 2016 so they will stop charging our accounts per whatever transactions we do, the CBN wakes up and writes a directive that to balance the economy the banks may charge N1 per mille as account maintenance charge when we were supposed to come to zero COT. At what point will Nigerians breathe easy?
Consumers are asking themselves, ‘Why should I put my money in the bank? Because every time I put it in, it doesn’t come out the way I put it in’. This doesn’t happen everywhere in the world. You have laws that tell banks about what to charge. I have experiences with banks outside Nigeria that don’t charge your current account. They have other ways they make money. If you go to a bank and you want to do a transfer from your savings account to your current account, the bank charges N210. In fact, some consumers actually took pictures of the notice the banks posted in the banking hall. Look at the N50 stamp duty, if someone sent N1,000 to a student and N50 is taken on arrival and some businessman to whom somebody pays N10 million also pays N50, it means the ratio the student is paying is higher than the ratio the businessman is paying. That is not fair. Is government penalizing low-end consumers for being poor? The best thing to do is you can segment the people who pay the N50 stamp duty. The banks also make a percentage on every POS transaction. They trade with the money at exorbitant interest rates. If they are using the money to make so much, why the charges? Some of the charges are levied on the same transactions. There is SMS charge, sometimes they send multiple SMS which the customer is compelled to pay for. That is multiple charges.
‘No Banking Day’ is the first in the series of actions that we will take to make these banks recognize the fact that they are in transaction with a partner. Because you have access to the money does not give you the right to continue to exploit in a way that abuses the trust. Since it is a contract, we should sit down and agree that every time you want to take money from my account, you should alert me. They bank on the fact that most Nigerians don’t complain.

Looking at consumer laws in the country, would you say they are effective enough? If not, what are you doing about that?
We have terrible consumer laws but we are also doing something about that. We have bills sitting in the National Assembly accumulating dust. We have a Consumer and Competition Bill that is merged together to get a stronger and more effective consumer protection law that will effectively protect customers. Second, the structures don’t support you. We don’t have small claims court, we don’t have mediation, and we don’t have arbitration available for you to get things sorted out. The stress of going to court to iron out complaints discourages consumers. And service providers know this and they take advantage of it. We are trying to gather all the small ones and let them know they have power. If we don’t engage them, the banks will keep exploiting them.
What is the role of the Consumer Protection Council in all of this?
The Consumer Protection Council (CPC) has a responsibility to protect the consumer but they have a process. You will need to first complain to the service provider, and if he doesn’t satisfy you with the explanation, you can then take it to CPC. CPC is also a much underfunded agency. Because it doesn’t make money for government, the government doesn’t fund it. It is not like NDDC or any of the agencies who are in a position to bring in money. This is despite the fact that Nigerians pay the government VAT and the least the government could do is take money from the consumption tax and use to protect the consumers who pay it.
Hence, Nigerians need to find other creative ways to enforce their own rights. In a market that is touted to be a free economy, the consumer should be king. I can decide how I want to spend my money. So if you are over-charging me I can avoid your business. If I avoid your business for one day, there is no way you will not feel it. It is just to let them know that they can’t keep putting this pressure upon the customers. It is because the banks know that individually the customers can’t make a difference in their bottom-line, so they get complacent with listening to the complaints.
If we are able to bond together, take one action at the same time so that it will impact the banks, it will be enough. Collectively is the only way the consumers can make a difference. The only people who write them individually are the high net worth people, they are the ones the banks negotiate with. The low net worth people who form the majority are denied their right to negotiation. The banks just sit down and wait for you to go and work hard and bring your money for them to keep, then they will scheme how to rip you off. In the end, it looks as if we are all working for the banks. If the banks are going to declare profit, let it be profit that they actually worked for and earned.

The CBN regulates the banks, so why target the banks directly and leaving the CBN out?
As consumers we don’t have direct access to the CBN. We deal with the banks who are agents of CBN. The other day the Nigeria Labour Congress (NLC) and civil society groups went out against the electricity distribution companies (Discos). They could have picketed the Nigerian Electricity Regulatory Commission (NERC), but the Discos are the point through which the consumers interact with the business; they are the ones who put direct pressure on the people. A day before the protests, the director-general of the NERC was on Channels Television justifying the prices because he gets the pressure passed on to him. We want the banks to take the pressure to the CBN. If one day the banks that the apex bank regulates bring their balance sheet and say they had a 40 percent drop in profit because the consumers refused to transact with them, a serious-minded management would want to do something. There are some Nigerians who can do business without the banks. Some are already living outside the banks. We don’t want to shut down the banks, we are only saying let it be fair. We need to dialogue. We need to sit down and say, please explain these charges.

Has any of the banks indicated any interest to talk since the petition started?
It was when I ran the petition against GTBank that they called me. I went there and when they realized that I wasn’t going to budge, they felt I had personal issues with them. But that wasn’t the case; I was only offended by the fact that I did not at any point agree with them to pay N100 before they withdrew the money. To jolt them is why the campaign is being pushed forward. I spoke with GTBank twice to explain to me how they maintain my ATM card. It wasn’t an attempt to ruin their business because we need banks. But they couldn’t explain. The cards don’t cost N1,000 to produce because they produce in large quantity and the cost is much reduced.

The date of the planned protest is fast approaching. What is the level of mobilization so far?
Nigerians are not very good with signing petitions. But on Facebook we have over 200,000 people who have seen the petition pushing to about 8,000 are interacting with it. There are 1,000 shares. As we speak people are still sharing. The awareness level is amazing. People even stop me on the road to tell me, ‘I am with you and I follow you on Facebook’. I am not the only one running the campaign. We have been able to collaborate with a lot of fellow consumer protection rights groups. We are also getting a lot of platforms with many media people, which is quite encouraging. This is especially because everybody is affected. Creating a platform doesn’t mean you are championing it alone. We have been on Unilag FM; the students are creating a jingle for us and airing it because it affects them most. You can see the pain on the students. Some people should be protected from these charges. We will also have a town-hall meeting. We are partnering with Market Ombudsman on that. There are celebrities who are also eager to shout for us.

 

FRANK ELEANYA