A few days ago, I received feed-back from a gentleman by name David Winansone on my article concerning deposit insurance protection. He then sought my opinion on what actions depositors can take to have their funds paid them by their bank after many days of its inability to do so. Subsequently, I watched on television some of the aggrieved customers of the institution in question expressing their frustration.
Even though I am not privy to communication between the institution and its customers on how they intend to resolve the challenges, the incident awakened me to the fact we have not done much in terms of public education as required under the Consumer Recourse Mechanism Guidelines for Financial Service Providers.
This Directive was issued in February 2017 and provides a mechanism for the public and financial institutions alike to seek redress to their grievances resulting from the banker-customer relationship. Principle (7) of the Directive states that “all consumers shall have access to adequate complaints-handling and redress mechanisms that are easily accessible, independent, fair, accountable, timely and efficient”.
In recent times, we are witnessing increasing numbers of protests by customers who are aggrieved with their financial institutions. This script attempts to enlighten the public on this, especially those who are unaware of the laid-down procedures for peaceful resolution of such issues.
In effect, it aims at re-emphasising the need for stakeholders to do more public education to minimise the recurrence of open agitation by aggrieved customers. So, this script focuses on (1) complaints-handling; and (2) redress mechanisms in line with principle (7) of the directive.
To kick-start the process of complaints-handling and resolving them, the Directive makes it mandatory for financial services providers to display at their offices and branches visible posters illustrating the stages customers should go through to submit their complaints.
The sample poster accompanying the directive requires the financial services providers to customise it to suit their names and logos. Indeed, all the banks and specialised deposit-taking institutions in the country have the customised posters in their offices. As to whether customers are fully aware of their rights described therein is the crux of the matter.
Apart from the poster, the financial institutions are also required to provide up-to-date information through all their communication channels – including websites, product disclosure forms, pre-agreement statements, contracts and agreements, or account statements to customers.
Complaints take many forms and may relate to disputes on account balances, interest rates, fees, commissions and other charges. Depositors also have the right to register their complaints on non-accessibility of their funds or non- payment/delayed payment of their funds with their banks. The complaints must be done through appropriate channels.
The Directive requests that customers present their complaints through any of the following channels: verbally, in person or by telephone; in writing personally at the bank; or in writing through post to the bank (SDI). The Directive also expects the financial institutions to make it easy for all categories of customers, including illiterates, to register their complaints while acknowledging receipt of such complaints within five (5) days of receiving them.
Now, one may ask: Have the customers officially registered their complaints and had them acknowledged by the financial institution, but they were not resolved within the stipulated time?
I must admit that it is difficult for customers to exercise restraint in such situations when they are in dire need of funds for their activities. Their apprehension can be understood from the experiences of people who lost their money to uninsured or unlicenced institutions – but this is not the situation at hand, the institution concerned is licenced.
Since their relationship with the institution is contractual, grievances must be resolved within the ambit of law. Demonstrations do not resolve the grievances but cause disaffection and negate the institution’s goodwill before the public; hence, worsening the situation. Therefore, the peaceful resolution process must be exhausted in all respects.
The Directive makes it mandatory that the financial services provider is the first port of call for resolving complaints. The Directive clearly states that “the financial service provider shall resolve the complaint and present the decision to the complainant no later than twenty (20) working days after the date of receipt of the complaint”.
It also grants an additional ten (10) working days for the institution to resolve the complaint if it is unable to do so within the initial twenty (20) working days. But in seeking the additional ten (10) working days, the financial service provider is equally mandated to notify the customer in advance.
The second step in the resolution process requires any customer who is dissatisfied with the redress from the institution – or even the institution itself in such a situation – to refer the matter to the Bank of Ghana for arbitration. The matter can be taken to court when a customer is completely dissatisfied with the Bank of Ghana’s decision.
It is therefore appropriate to open up and ask the question: Have these customers exhausted the administrative structures for redress? Have they explored the court system, which is the last resort to have their funds paid to them? You and I are not there. The evidence of how well the complaints of non- payment or delayed payment have been managed by the parties can be seen on the institution’s premises – inundated by the angry customers.
Indeed, no licenced bank or deposit-taking institution would deliberately fail to pay its customers as required by the tenets of contractual relationship between them. It is obvious that the current impasse is largely connected with liquidity challenges the institution is experiencing and working hard to resolve. But the incessant demonstrations are evidence of the fact that recourse mechanisms are not being utilised to the letter.
Even if some customers are aware of the resolution processes, much effort is required to build trust thereof. We, therefore, need regular public education programmes for customers to know their rights and responsibilities under the recourse mechanism. These will not only prevent public outcry but also safeguard the banking system from unwarranted panic withdrawals. Mr. David Winansone, I am once again grateful to you and other readers for your feed-back that has given birth to this article. God Bless.
This script was written by a Chartered Banker with a flair for feature writing. Apart from his work schedules, he edits or proof-reads corporate material for his colleagues, executive managers – including distinguished professionals working in various fields outside Banking. Through this column, his articles feature on third-party online media platforms in Ghana and outside. Email: Kwaku.Anumu@gmail.com