CBN Directs Banks To Stop Misleading Customers With Adverts

The Central Bank of Nigeria has ordered financial service institutions and commercial banks to immediately seize from using promotional materials that do not conform with established marketing extant rules in the country.

According to the Yemi Cardoso-led apex bank, the directive was meant to ensure that bank customers are protected in line with the Consumer Protection Regulation Act 2019 and the Advertisement Guidelines enabling laws for deposit money banks and other Financial institutions., OFIs.

In the circular issued  on Thursday by Olubunmi Ayodele-Oni, CBN’s Director of Compliance Department, the apex bank said it has uncovered widespread inconsistencies and lack of transparency in promotional materials by some of these banks and payment institutions, saying some of the information provided are largely exaggerated, as they are linked to the unaudited financial statements of the said banks, and in most cases not beneficial to the customers.

The government bank, has therefore, banned promotional inducements such as lotteries, lucky dips, prize draws and other chance-based incentives, stressing that  such schemes are capable of pushing customers to make harmful financial decisions.

Instructively, the apex bank said commercial banks and OFIs must henceforth ensure that advertisement complied with regulatory framework, saying it will not hesitate to sanction them for any infractions.

The CBN also directed the banks to withdraw such advertisement within 30 days, submit a compliance attestation jointly signed by the Managing Director or Chief Executive Officer, the Executive Compliance Officer, and the Chief Compliance Officer.

CBN said: “New compliance steps for all advertisements. Under the tightened framework, financial institutions must now submit detailed notifications to the CBN before releasing any advert or marketing material.

“The notification must include the duration of the advert, creative content to be aired or published, intended demographic and geographic targets, and written confirmation of internal clearance by both the compliance and legal departments.

“This attestation must confirm that all current advertising and promotional practices meet regulatory requirements and internal governance rules,

“Sanctions will be applied to any institution found violating the rules, in line with the Banks and Other Financial Institutions Act 2020 and the Consumer Protection Regulations,” the bank said.

It said it will begin to apply sanction on banks for infractions beginning from January next year, after investigating the level of compliance.