Consumer protection in the sphere of banking products and services in Cameroon comprises the body of laws, regulations, and institutional rules established to guarantee fair treatment, transparency, and safety for individuals availing themselves of financial services. It serves to protect consumers against fraud, predatory lending, concealed charges, and unfair commercial practices, whilst ensuring the provision of clear and accurate information pertaining to risks and costs, and the availability of effective mechanisms for the resolution of complaints.
Key Aspects of Consumer Protection in Banking in Cameroon
- Transparency & Disclosure: Banks in Cameroon are required to provide clear and comprehensible information regarding the terms and conditions, interest rates, and fees applicable to their products and services, including by way of fee information documents or key facts statements, as appropriate.
- Fair Treatment & Suitability: Financial institutions in Cameroon are required to conduct themselves with honesty and professionalism in all dealings with consumers, ensuring that any products sold are appropriate and suitable for the individual needs of the consumer concerned.
- Data Security & Privacy: Consumer protection mechanisms include safeguards designed to ensure the confidentiality of customers' personal and financial information.
- Redress & Complaint Handling: Consumers have the right to access dispute resolution mechanisms that are efficient, affordable, and independent, ensuring they can seek and obtain fair compensation where appropriate.
- Responsible Lending & Anti-Usury: Applicable regulations in Cameroon prohibit unethical debt collection practices and impose an obligation on lenders to conduct a thorough assessment of a borrower's capacity to repay prior to extending credit, thereby affording protection against predatory lending practices.
- Protection of Funds: Measures such as deposit insurance protect consumer deposits.
OBLIGATION OF INFORMATION AND TRANSPARENCY FOR BANKS IN CAMEROON
Institutions subject to the regulation shall publish their banking terms and conditions applicable to customers in accordance with the provisions of Title 4 of the UMAC Ministerial Committee Regulation of December 20, 2019, concerning the effective annual percentage rate, the suppression of usury, and the publication of banking terms and conditions in the CEMAC region.
The Banking Commission, after consulting with the Central Bank, the National Financial Prosecutor's Offices (CNEF), and the professional associations of the institutions subject to this regulation, shall determine:
- The common names of the most frequent banking operations, products, services, and fees;
- The templates and formats of banking terms and conditions and fee schedules.
This information shall be reviewed every three years.
Any advertising for a banking product or service aimed at consumers that contains, in any form whatsoever, false or misleading claims, indications, or presentations is prohibited when these relate to one or more of the following elements: availability and dates of availability, nature of the product or service offered, price and terms of sale, terms of use, scope of commitments made by the consumer, scope of commitments made by the institution, or the identity or qualifications of the institution.
The use of email for advertising purposes is prohibited without the prior and express consent of the consumer.
Any advertising aimed at consumers that compares products or services by implicitly or explicitly identifying a competitor or goods or services offered by a competitor is only lawful if:
- It is not misleading or deceptive;
- It relates to products or services that meet the same needs or have the same purpose;
- It does not create confusion between the establishment and a competitor, or between the establishment's trademarks, trade names, other distinctive signs, products, or services and those of a competitor, etc.
The establishment subject to the regulation must provide the consumer, prior to any commitment, with essential information about their rights and obligations vis-à-vis the establishment, as well as the advantages and risks associated with each product it offers, so that the consumer is able to understand the characteristics of the product or service offered and its impact on their financial capacity and, where applicable, on any assets offered as security, including mortgaged or encumbered assets.
This information, the commercial nature of which must be clearly apparent, is provided in writing, in an official language of the State, in a clear and easily understandable format, including electronic transmission when the initial contact with the consumer stems from an offer made electronically. It is also explained verbally to consumers who visit the bank's counters or who are solicited by the bank, in a clear and understandable manner. Where applicable, the bank discloses any conflicts of interest related to the intermediary, distributor, or sub-distributor through whom the product is marketed.
The consumer is informed, in writing on paper or another durable medium, in an official language of the State where the institution is established, in a clear and easily understandable form, of the terms of the agreement before being bound by an offer.
The opening of a bank or payment account and the subscription to a banking product or service are subject to the conclusion by the regulated institution, its intermediary or distributor, where applicable, and the consumer, of an agreement that clearly establishes, in the official language of the State chosen by the consumer, in a legible manner, under penalty of nullity:
- The identification of the regulated institution;
- Where applicable, the identification of the intermediary, distributor, or sub-distributor, including their trademark, logo, and company name;
- The identity of the consumer, as evidenced by a valid official document presented by the consumer;
- The main features, conditions of use, a description of the possible uses of the product, and the limits applied to authorized transactions;
- The respective obligations and responsibilities of the consumer and the institution;
- The pricing conditions of the contract, including fees, commissions, penalties, and, in the case of credit, the interest rate, the annual percentage rate (APR), the usury threshold, and the amortization schedule;
- The main advantages associated with the banking product or service;
- Where applicable, the risks and precautionary measures inherent in the use of the product;
- The consumer's right to make a complaint and the related procedures;
- The terms, procedures, and time limit for reporting theft, loss, or falsification of a payment instrument or requesting a refund of funds etc.
The agreements covered by the regulation must not refer to any other contracts, rules, practices, texts, or documents that are not known to the consumer or made available to them before the execution of said agreements.
Any modification to the information and conditions of the agreements provided for by this regulation, contemplated by a regulated institution, must be proposed by the institution to the consumer in writing, with proof of receipt, in the official language of the State chosen by the consumer, in a clear and easily understandable form, no later than one month before the date on which it is scheduled to take effect.
The institution must inform the consumer of the provisions of Article 23 of the regulation.
Any transaction ordered by a consumer must give rise to the provision to the consumer, immediately and free of charge, in writing on paper or another durable medium, of the following information:
- The name of the institution;
- The reference number of the intermediary, distributor, or sub-distributor, where applicable;
- The nature of the transaction and the related banking product or service;
- The amount and fees of the transaction;
- The date, time, and reference number of the transaction.
When closing an account, the obligated institution must provide the consumer, upon request, with a summary of the transactions on that account for the past twelve months, free of charge and without conditions, within ten business days of the account closure request.
The account balance must be returned to the consumer within ten business days of receiving the account closure request, when the consumer requests it, or of notification by the obligated institution to the consumer of the account closure, when the closure is initiated by the institution.
The obligated institution bears the burden of proving that it has complied with the information requirements set out in this section.
In the context of relations between regulated establishments and consumers, electronic documents, including electronic transmissions, may replace paper documents and are recognized as equivalent, particularly with regard to their legal validity and evidentiary value, when:
- The regulated establishment and the consumer have agreed to this;
- The electronic document is created and maintained using a reliable technical process that guarantees, at all times, the origin of the electronic document and its integrity during processing and electronic transmission.