The general objective of the project is to strengthen
consumer protection policies in the Caribbean by reinforcing the
capacity of non-government consumer organisations and government
agencies, and by increasing consumer awareness about their rights,
in particular within the banking and credit sector.
Draft banking code
The Minister of Industry, Investment and Commerce of Jamaica,
the Honourable Anthony Hylton, has endorsed several key elements of
a draft banking code for the Caribbean, and has invited all
stakeholders to work together to develop a progressive code, which
embodies international best practices and is acceptable to the
banking sector and consumers alike.
Addressing a consultation on the draft banking code at the
Courtleigh Hotel in Kingston, on 19 January 2012, the Minister
reflected on the 2010 Consumer Affairs Commission (CAC) survey of
bank charges, which revealed significant differences in fees
charged by commercial banks of over 100 per cent. He observed that
the findings provided the "catalyst for the development of the
proposed banking code."
The development of the code is part of the 'Promotion of
Consumer Protection in the Caribbean' project, funded by the
Inter-American Development Bank (IDB), which involves Jamaica,
Barbados and Trinidad and Tobago. The draft document is now the
subject of consultations among the various interest groups,
including the Bank of Jamaica, financial institutions and consumer
organisations.
Voluntary vs enforceable code
The Bank of Jamaica, which is in the process of developing an
'enforceable' code of conduct for deposit-taking financial
institutions, has submitted comments to the CAC on the draft
'voluntary' code.
Executive Director of
the CAC, Dolsie Allen, explained that the CAC/Consumer
International led project would result in the 'voluntary code',
while the Central Bank would develop an enforceable code that would
likely attract sanctions for breaches.
Meanwhile, commercial banks and other financial institutions,
while indicating that as a fraternity they are considering
developing their own code of conduct, are now displaying interest
in the review of the draft voluntary code, and many individual
banks were represented at the latest consultation.
Regional Project Co-ordinator, Consumer International, Candice
Ramessar, emphasised that the draft code is not an attempt to
coerce the banking sector, but rather to encourage them to adopt
practices and principles that are in the best interest of the banks
as well as their customers.
11 key commitments
The draft code contains 11 key commitments, which include:
- non-discriminatory access
- service standards
- product information
- credit information
- variation in fees and charges
- provisions for elderly
- disabled and pregnant consumers,
- and dispute resolution.
Display service standards
Among the key commitments of the draft code is a requirement
that all consumers should have equal right of access to service
provided by the banking institution, as long as the customer meets
the entity's requirements of access to the service being requested.
It also states that the banks should display service standards at
their branches and on their websites, as well as make copies
available on request. In addition, the characteristics of all
products should be clearly explained to the consumers, including
all related charges that exist or may be implemented.
Contracts
Terms and conditions of contracts should be fair and should set
out both parties' rights and responsibilities in plain and simple
language, while legal and technical terms should only be used if
necessary. The customer must be provided with a copy of the terms
and conditions, and the contract. Importantly, the draft code
stipulates that there must be a cooling off period of 72 hours for
all contracts without any disputed penalties, charges or interests
being applied to the customer. This period should commence from the
time of the customer's signature, and weekends and holidays should
not be included in that 72-hour period.
Fees and charges
The code also states that banks will provide notification of
changes in fees and charges at least 60 days before they are to
take effect. Automated Teller Machines (ATM) are to display all
fees associated with each transaction prior to the completion of
the transactions, and customers should be given the option of
discontinuing the transaction if they do not wish to incur these
costs. Following further consultations, the code is expected to be
finalised by June 2012 when the project will come to an end.