Financial Crime World

Jordan’s Financial Institutions Must Prioritize Consumer Protection

A Major Step Towards Transparency and Fairness

Amman - The Central Bank of Jordan (CBJ) has taken significant steps to promote transparency and fairness in the treatment of customers, issuing guidelines that aim to protect consumers from unfair sales and collection practices.

Guidelines for Compliance

The CBJ issued “Instructions on Dealing with Customers Fairly and Transparently” No. 56/2012, which came into effect in May 2013. These guidelines cover a range of issues, including:

  • Transparency and Credit Controls: banks must provide clear information to customers about their financial products and services, as well as ensure that credit controls are in place for retail portfolios.
  • Limits on Commissions and Fees: there are now limits on certain commissions and fees charged by banks for banking services.
  • Protection of Dormant Accounts: accounts with no activity for a certain period will be protected from being charged maintenance fees or other penalties.
  • Effective Complaint Resolution Mechanisms: banks must establish a separate unit for handling consumer complaints, staffed by well-trained and qualified personnel.

Expansion of Central Bank’s Scope

In addition to these guidelines, the CBJ has amended its law to expand its scope of functions to include:

  • Setting Rules and Standards: setting rules and standards for treating consumers fairly and transparently.
  • Raising Public Awareness: raising public awareness on banking and financial activities.

New Department for Financial Consumer Protection

The Central Bank has launched a new “Financial Consumer Protection” department, responsible for promoting transparency and fairness in the treatment of customers by banks and other financial institutions supervised by the CBJ. The department aims to:

  • Enhance Competitiveness: promote competition among financial institutions, reducing risks and improving services.
  • Protect from Reputation and Legal Risks: protect financial institutions from reputation and legal risks associated with unfair practices.
  • Contribute to Sustainable Economic Development and Financial System Stability: contribute to sustainable economic development and financial system stability.

Consumer Protection: A Key Element in Achieving Financial Inclusion

Consumer protection is a key element in achieving financial inclusion, as it boosts confidence and competitiveness in the financial sector. Without such measures, consumers may be exposed to unfair practices and poor financial decision-making.

Conclusion

The CBJ’s efforts are seen as a major step towards promoting transparency and fairness in Jordan’s financial sector, ensuring that consumers have access to appropriate financial services. This move will contribute to sustainable economic development and financial system stability, ultimately benefiting the entire community.