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Tanzania’s Electronic Payment Laws Fall Short: Experts Urge Reform

Dar es Salaam - The laws governing electronic payment systems in Tanzania are inadequate, leaving customers vulnerable to financial loss and exploitation. A study by experts has highlighted six major areas of concern.

Major Areas of Concern

• Liability for Erroneous Transactions: Banks are not liable for their failure to stop pre-authorised credit transfers unless the customer can prove it was caused by an act of God or a technical malfunction known to them at the time.
• Lack of Protection for Minors: There is no provision requiring banks and financial institutions to verify the age of minors before effecting a transaction.
• Double Charging: Tanzania’s laws do not prohibit double charging, which can result in increased costs for mobile money transactions.
• Error Resolution Procedures: There is no provision for error resolution procedures, making it difficult for customers to seek redress when mistakes occur.
• Liability for Technical Malfunctions: Banks are not liable for technical malfunctions unless they are caused by an act of God.
• No Provision for Error Correction: There is no provision requiring banks to inform customers about errors and correct them within a certain timeframe.

Comparison with International Best Practices

In contrast, the United States has comprehensive laws that address these issues. The study noted that US regulations require banks to:

• Inform customers about errors
• Correct errors within a certain timeframe
• Provide provisional re-accrediting pending further investigation

Australia also prohibits multiple pricing under the Trade Practices (Amendment of Consumer Act).

Recommendations for Reform

The researchers urged the government to reform the electronic payment laws to better protect customers and ensure fairness. They suggested that Tanzania could learn from international best practices, such as those set out by the Organisation for Economic Co-operation and Development (OECD) on Consumer Policy Guidelines on Mobile and Online Payment.

“It is essential that we codify our laws to provide clear guidelines for banks and financial institutions,” said a leading expert in the field. “This will enable customers to demand their rights and seek redress when necessary.”

Call to Action

The government has been urged to take immediate action to address these concerns and ensure that electronic payment systems are fair, transparent, and customer-friendly.