Financial Crime World

Mozambican Government Urged to Strengthen Consumer Protection

Maputo - Mozambique

The Mozambican government has been called upon to strengthen its consumer protection mechanisms in the banking sector. Concerns have been raised about the lack of effective enforcement of laws and regulations protecting consumers’ rights.

Lack of Effective Enforcement

According to a recent report, while there are laws in place to protect consumers, they are often not respected by financial institutions. The report recommends that the government establish a new financial consumer protection unit within the Bank of Mozambique (BdM) to monitor and enforce consumer protection provisions.

Recommendations for Strengthening Consumer Protection

  • Establish a new financial consumer protection unit within the BdM to handle complaints and monitor market conduct issues.
  • Strengthen the roles of existing bodies, such as the Banking and Securities Commission (BSD) and the General Inspectorate for Financial Services (GPI), in order to improve consumer protection.
  • Designate teams within these institutions responsible for financial consumer protection.
  • Establish a consumer protection and business conduct task force comprising heads of department from GPI and BSD, as well as representatives of both institutions.

International Experience

International experience indicates that giving responsibility for supervising financial consumer protection laws and regulations to a single body is most effective in ensuring compliance with these rules.

Constitutional Obligation

The Mozambican government has a constitutional obligation to provide assistance to consumer associations and support their initiatives. However, it appears that this obligation is not being met, as consumers’ rights are often not respected by financial institutions.

Conclusion

Strengthening the capacity of the BdM to monitor and enforce consumer protection laws and regulations is crucial in addressing these concerns. This would help to ensure that financial institutions operate fairly and transparently, protecting the interests of consumers.

Free and Fair Elections Crucial to Effective Consumer Protection

The government’s ability to effectively protect consumers’ rights is closely tied to the democratic nature of its governance. The government must be accountable to its citizens, who should have a say in how it operates through free and fair elections.

Prioritizing Consumer Protection

Therefore, the government must prioritize consumer protection and ensure that financial institutions operate fairly and transparently, protecting the interests of consumers. This can only be achieved through effective governance and a commitment to democratic principles.