Consultations on draft Financial Consumer Protection Bill start tomorrow |19 June 2020

(L to r) Dr Fanny, Governor Abel and Ms Auguste during the press conference (Photo: Thomas Meriton)

The Central Bank of Seychelles (CBS) and the Financial Services Authority (FSA) are starting discussions with the general public and other stakeholders, as from tomorrow, on a new piece legislation, the Financial Consumer Protection Bill, which is being proposed for greater consumer protection for services in the financial sector.

The law allows in the first instance for both the consumers and the financial service providers to mediate their differences among themselves further to seeking direct mediatory assistance from CBS and FSA as the financial regulators.

In a press briefing on the proposed law, held at the CBS conference room on Wednesday morning, CBS governor Caroline Abel, in the presence of the chief executive of FSA, Dr Steve Fanny, said that the proposed law came about following concerns and complaints by the public and also in view of the digitalisation of the financial sector.

She noted that during working timeframe of the legislation, a lack of transparency was observed in documentations being provided to clients and therefore raises the need to introduce the consumer protection framework promoting international principles, such as equitable and fair treatment of consumers, increased transparency, responsible pricing, protection of data and privacy, complaint handling and resolution, among priorities identified in the Financial Sector Development Implementation Plan (FSDIP) adopted by the government in 2014.

Governor Abel added that the CBS and FSA, as regulatory bodies, have had intensive working collaboration with the Fair Trading Commission (FTC), the sole consumer protection entity, in general, in Seychelles but in view of the specific nature of the financial services in the country, it was felt that it was important to have this specific consumer protection legislation to assist them (CBS and FSA) in providing a better balance in terms of fairness, between consumers and financial service providers.

She further added that CBS and FSA were in the past just acting as mediators between clients and institutions, and will as from the assent of the act, probably by the end of the year, be the mandatory direct mediators between them. CBS will be the mediator on banking service issues in relation to banks, money changers, mobile money services, Housing Finance Company, to name a few, while FSA will be the mediator mainly in the insurance and gambling service issues. Depending on their specific areas of complaints, clients affected will either go to the two regulatory bodies directly or through their websites to launch their complaints.

“The benefit of the consultations is that in view that the financial services affect the public in regards to access to those services as individuals and businesses, it will help them to engage with us to highlight their concerns such that we are clear that the proposed legislation has covered the maximum realities that they are facing,” Ms Abel said, noting that the law will give both regulators more power than before to directly mediate dispute between clients and financial service providers.

While giving a brief overview of the bill, Beggita Vital, senior market conduct analyst, Financial Inclusion and Market Conduct division, stated that while it is the obligation of the financial service providers to show transparency in their services, it will also be the responsibility of the consumers, among other responsibilities, to educate themselves on the products and services on offer and to also bear in mind to respect their terms of contract and obligations.

She noted that non-compliance with the law by the financial service providers will result in suspension of licenses in part or in full, partial or total suspension of products and services or to refund the consumer affected.

She claimed that the law will prevent abusive practices.

The process of consultations will start as from tomorrow at 10.30am at the Pension Fund Building (auditorium), Grand Anse Praslin followed by another meeting at the La Digue Island Lodge on La Digue at 3.30pm the same day.

On Mahé, the public meetings will be held on June 27, 2020 at the International Conference Centre (ICCS) and the last meeting on July 4, 2020 at the Anse Boileau community centre.

CBS and FSA are calling for maximum participation and are urging members of the public to actively engage in those meetings.

For people who cannot make it to those consultation meetings, the proposed bill, in its white paper stage, is already available from the websites of both CBS (https://www.cbs.sc/Consumer/ConsumerProtectionBill.html) and FSA (https://www.fsaseychelles.sc/white-paper-review-financial-consumer-protection-bill/).

Comments can be submitted via e-mail to consumeraffairs@cbs.sc or on 4282086 for CBS and consumeraffairs@fsaseychelles.sc or on 4380800 (Policy & Legal Unit) for FSA. All comments should be submitted by July 10, 2020. The public consultation meetings are the last phase before the draft bill is finalised for presentation to the cabinet of ministers and subsequently the National Assembly.

The CBS and FSA have worked in collaboration with relevant stakeholders within the financial sector, particularly institutions falling under their regulatory purview, to develop the necessary policy proposals, which were approved by the institutions’ respective boards and subsequently the cabinet of ministers in November 2017.

Taryn Auguste, manager, legal unit, FSA, was also present at the briefing.

Patrick Joubert