Financial Sector Needs An Ombudsman

Dr. Kobby Mensah, marketing lecturer at the University of Ghana Business School says Parliament should consider the setting up of a financial Ombudsman with the legal powers to mediate between financial institutions and customers, as the number of banks increases and electronic-based products proliferate.

“I think we need a financial Ombudsman mediating between financial institutions and customers when things don’t go as expected. I think it is crucial for financial services because people’s welfare and livelihoods are at stake.”

“We must hold these financial institutions to the challenges of producing good quality services for the monies that they are taking from us. We cannot hold back any longer. If we want this country to develop, then a financial Ombudsman with clear-cut responsibilities and powers is needed,” Dr. Mensah said.

A financial Ombudsman is the mediator in many jurisdictions that resolves issues if a business and a customer can’t resolve a compliant themselves.

In the UK for instance, the Financial Ombudsman Service is set up by Parliament as the UK’s official expert in sorting out problems with financial services.

It is able to give an unbiased answer about what’s happened. If the Ombudsman decides that someone’s been treated unfairly, it has legal powers to put things right

There are about 34 universal banks, four other international banks with representative offices in Ghana – Citibank N. A, Ghana International Bank Plc, Exim Bank of Korea, and Bank of Beirut.

There are also more than 429 licensed microfinance institutions offering various financial products to the public as at July last year.

There are also 70 Non-Bank Financial Institutions (NBFs). This is made up of 22 Finance Houses; 2 remittance companies; 3 Credit Reference Bureaus; 37 Savings and Loans companies; 2 leasing companies; 3 finance and leasing companies; and one mortgage finance institution.

However, all these institutions have devised their own means of addressing customer complaints. These mechanisms are fraught with prolonged delays and mistrust leaving disgruntled customers with no one to turn to.

“But can you go to the Central Bank? The Central Bank is too big! I don’t think the Central Bank can do that. “The entire electronic-driven financial system looks like it has overtaken the BoG and it doesn’t see the down-trodden level; it is just the strategic things they do,” he said.

He added that: “A lot of people don’t know the interest rate, whether it is gone down or up, and how that impacts on their financial product–whether it means their loan repayment must go down or up. “

Recalling his experience with a bank and two intermediaries, Dr. Mensah said: “I was effecting a mobile money transaction with Ecobank and they took twice from my account. I called Express Pay, the app developer, who said the payment failed and that made sense because I could see the message.

Ecobank told me it will take between 7-45 working days to reverse the transaction. Imagine if that was the only money I had; they were going to hold on to my money for between 7-45 days because it was a Visa policy. When I contacted Visa, they referred me back to Ecobank’s refund policy. We need an Ombudsman now.”

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