Financial Education - TKO Financial Wellness Academy

By Tokiso TKay Nthebe A question I often ask my clients who are consumers of financial products and services is “do you know your rights and responsibilities?” Many a time, I am confronted with blank stares, which is quite concerning. For many years, consumers of financial products and services were mistreated by Financial Service Providers (FSP) which left consumers vulnerable. Countries such as the Republic of South Africa for example introduced the Treat Customers Fairly (TCF) which seeks to address this. Lesotho recently followed suit by enacting the Financial Consumer Protection Act No.7 of 2022 in June this year. What is the Financial Consumer Protection Act? The Financial Consumer Protection Act (FCPA) seeks to protect and outline the rights of consumers of financial products and services. As discussed in the article “Do you know your rights as a consumer of financial products?” consumers have a right to be treated fairly, provided with correct and honest advice that takes their circumstances into account. What should consumers know about the FCPA? In a video shared on My Money Adventures YouTube channel, I discuss salient points from the Act that are important. As a consumer you have the following rights; To be provided with comprehensive information about the financial product or service. This includes the key facts of the product/service, benefits, features, inherit risks and associated costs. All terms and conditions of the product or service must be disclosed and explained to the consumer. Where a consumer is applying for credit facilities, the FSP must inform the consumer that a credit check will be done and what information or documents will be required. Consumers have a right to choose which product or service they want without being incentivised or coerce into buying something else. Consumers also have a right to move from one FSP to another. FSPs are prohibited to make any deductions of interest, fees, or charges without informing the consumer. Furthermore, FSPs cannot make changes to the initial contract or terms and conditions without the consumer’s consent. FSPs are prohibited to discriminate against any consumer based on gender, marital status, sexual orientation, income, political beliefs, or religion. Lastly, consumers have up to five (5) days cooling off period before taking up a product or service. Personally, I am excited about the developments within the financial services industry in Lesotho because protecting and treating customers fairly helps establish trust and confidence. Where a consumer has been mistreated by a FSP, the Act also provides a complaints management process that can be followed and/or can be escalated to the Financial Consumer Protection unit with the Central Bank of Lesotho. While having rights is important, I also encourage consumers to familiarise themselves with their responsibilities and to conduct their finances in a responsible manner. For more information on the FCPA of 2022, you can visit and download it on the Central Bank of Lesotho’s website www.centralbank.org.ls Article first appear on Insure Digest in December 2022

Tag: Financial Education

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