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‘Don’t call customers’ relatives over debt recovery’- CBN warns financial service providers

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The warning from CBN to financial service providers is clear – they should refrain from contacting customers’ relatives for debt recovery purposes. The caution was issued in a document titled “Revised Consumer Protection Regulations,” released on Thursday on the official website of the Central Bank of Nigeria. The apex bank emphasized the importance of respecting data privacy and notifying customers of their outstanding obligations before commencing debt collection. The document aims to ensure that financial institutions abide by consumer protection principles, and emphasizes the need for transparent, courteous, and fair debt recovery processes. It also advocates for providing customers with the option of a private sale before foreclosure, to be exercised within 30 days unless waived by the customer. The providers are also restricted from contacting friends, employers, relatives, or neighbors for any information other than employment status, telephone numbers, or addresses, unless the person has guaranteed the loan or consented to be contacted. CBN mentioned that the review of the 2019 Consumer Protection Regulations was imperative to safeguard consumers’ interests and provide them with greater protection in the evolving financial services landscape. Earlier, the Federal Competition and Consumer Protection Commission, FCCPC, had delisted 18 digital money lending technology companies for breaching customers’ privacy during the loan recovery process.

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