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Final- Unsafe in Any Currency

Final- Unsafe in Any Currency

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Published by Jean Lukaz

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categoriesBusiness/Law
Published by: Jean Lukaz on May 15, 2011
Copyright:Attribution Non-commercial

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05/15/2011

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UNSAFE
 
IN
 
ANY
 
CURRENCY
 
 ARE 
 
FINANCIAL
 
SERVICES
 
PROVIDERS
 
RIPPING
 
OF
 
POOR
 
CONSUMERS? 
 
Access
 
to
 
financial
 
services
 
is
 
now
 
considered
 
a
 
basic
 
consumer
 
right
i
 
but
 
the
 
evils
 
of 
 
banking
 
and
 
insurance
 
and
 
the
 
vulnerability
 
of 
 
poor
 
consumers
 
have
 
grown
 
beyond
 
borders
 
and
 
continents.
 
In
 
Ghana,
 
where
 
over
 
80
 
percent
 
of 
 
Ghanaians
 
are
 
financially
 
illiterate,
 
and
 
this
 
amazingly
 
includes
 
highly
educated
 
folks,
 
the
 
financial
 
services
 
sector
 
has
 
been
 
swarmed
 
by
 
predatory
 
lending
 
practices
 
from
 
those
 
businesses
 
pretending
 
to
 
be
 
commercial,
 
to
 
the
 
micro
finance
 
and
insurance
 
service
 
specialists,
 
to
 
the
 
non
commercial
 
quasi
NGO
 
(QUANGOs)
 
social
 
missionaries,
 
to
 
the
 
grey
 
area
 
of 
 
new
 
innovative
 
mobile
 
phone
 
banking
 
twists
ii
.
 
Consumer
 
naivety
 
in
 
financial
 
services
 
    W   o   r    k    i   n   g    P   a   p   e   r   :    #    7
THE
 
CONSUMER
 
PARTNERSHIP
 
(GHANA
)
consumer 
 
education
 
is
 
self 
 preservation
 
This
 
Working
 
Paper 
 
was
 
 prepared 
 
by 
 
 Jean
 
Lukaz
 
MIH 
 
 
Unsafe in Any Currency:
 Are
 
Financial 
 
Services
 
Providers
 
ripping
 
off 
 
Poor 
 
Consumers? 
 
http://www.theconsumerpartnership.wordpress.com;
 
http://www.ghanaconsumerwatch.wordpress.com;
 
http://www.ghanaconsumerwatch.blogspot.com
 
THE
 
CONSUMER
 
PARTNERSHIP
 
(GHANA
)
consumer 
 
education
 
is
 
self 
 preservation
 
       P     a     g     e
       2 
has
 
even
 
become
 
a
 
common
 
financial
 
 joke
 
in
 
Ghana
 
where
 
consumers
 
are
 
said
 
to
 
always
 
confuse
 
‘shares’
 
with
 
‘shirts’.
 
The
 
Financial
 
Services
 
sector
 
in
 
Ghana
 
and
 
in
 
Africa
 
seem
 
to
 
be
 
loosely
 
regulated
 
by
 
governments
 
and
 
businesses
 
are
 
 just
 
paying
 
lip
 
service
 
to
 
voluntary
 
codes
 
outlined
 
by
 
forums
 
such
 
as
 
the
 
Partnership
 
for
 
Making
 
Finance
 
Work
 
for
 
Africa
 
(MFW4A)
iii
 
and
 
the
 
UN
 
Blue
 
Book
 
on
 
Building
 
Inclusive
 
Financial
 
Sectors
 
for
 
Development
iv
 
that
 
have
 
inherent
 
measures
 
to
 
curtail
 
proliferating
 
cross
border
 
shylocks.
 
On
 
March
 
15,
 
World
 
Consumer
 
Rights
 
Day
 
(WCRD)
 
2010
v
,
 
The
 
Consumer
 
Partnership
 
in
 
collaboration
 
with
 
the
 
Ghana
 
Standards
 
Board
 
(GSB)
 
 jointly
 
organized
 
a
 
seminar
 
on
 
the
 
Consumers
 
International
 
global
 
theme
 
‘Our
 
Money,
 
Our
 
Rights’,
 
where
 
a
 
number
 
of 
 
financial
 
consumer
 
protection
 
initiatives
 
by
 
SPEED
 
Ghana
 
and
 
the
 
Ghana
 
Microfinance
 
Institute
 
Network
 
(GHAMFIN)
 
targeted
 
at
 
the
 
illiterate
 
and
 
poor
 
consumers
 
were
 
also
 
discussed.
 
This
 
had
 
been
 
an
 
important
 
step
 
in
 
targeting
 
the
 
non
English
 
speaking
 
population
 
as
 
financial
 
literacy
 
educational
 
road
 
shows
 
and
 
drama
 
were
 
conducted
 
in
 
local
 
languages.
 
The
 
best
 
consumer
 
protection
 
is
 
self 
protection
 
and
 
consumers
 
require
 
consumer
 
education
 
to
 
protect
 
themselves
 
in
 
the
 
market
 
place.
 
There
 
is
 
the
 
need
 
for
 
consumer
 
education
 
on
 
financial
 
services
 
to
 
focus
 
on
 
financial
 
capability,
 
responsible
 
finance,
 
consumer
 
protection,
 
and
 
the
 
conduct
 
of 
 
business
 
regulation
 
in
 
Ghana.
 
However,
 
most
 
consumer
 
education
 
efforts
 
by
 
government
 
agencies
 
are
 
ineffective
 
because
 
they
 
are
 
in
 
English
 
only
 
and
 
targeted
 
at
 
the
 
literate
 
population
 
who
 
read
 
one
 
or
 
two
 
major
 
newspapers.
 
This
 
leaves
 
about
 
half 
 
the
 
population
 
uninformed
 
and
 
uneducated.
 
Consumer
 
Protection
 
Advocacy
 
must
 
thus
 
border
 
on
 
the
 
need
 
for
 
access
 
to
 
stable,
 
secure
 
and
 
fair
 
financial
 
services,
 
which
 
is
 
important
 
for
 
consumers
 
everywhere,
 
not
 
least
 
in
 
the
 
context
 
of 
 
the
 
global
 
financial
 
crisis.
 
Government
 
policy
 
makers
 
have
 
a
 
duty
 
to
 
increase
 
consumer
 
information
 
(
 
‘truth
 
in
 
lending’
 
for
 
example),
 
invest
 
in
 
financial
 
literacy
 
initiatives
 
(i.e.,
 
consumer
 
education),
 
insist
 
that
 
the
 
retail
 
financial
 
industry
 
take
 
steps
 
to
 
protect
 
consumers
 
(self 
regulatory
 
codes
 
of 
 
conduct,
 
for
 
example)
 
and
 
encourage
 
the
 
development
 
of 
 
an
 
independent
 
regulatory
 
oversight
 
body
 
responsible
 
for
 
monitoring,
 
reviewing
 
and
 
taking
 
complaints.
 
In
 
order
 
to
 
protect
 
consumers,
 
the
 
Government
 
must
 
ensure
 
that
 
consumers
 
have
 
regular
 
reliable
 
information
 
on
 
what
 
services
 
financial
 
institutions
 
offer
 
at
 
which
 
price
 
and
 
what
 
the
 
risk
 
involved
 
is,
 
so
 
that
 
consumers
 
can
 
make
 
well
informed
 
choices.
 
THE
 
MORAL
 
LEAP
 
BY
 
BANK
 
OF
 
GHANA
 
 
Unsafe in Any Currency:
 Are
 
Financial 
 
Services
 
Providers
 
ripping
 
off 
 
Poor 
 
Consumers? 
 
http://www.theconsumerpartnership.wordpress.com;
 
http://www.ghanaconsumerwatch.wordpress.com;
 
http://www.ghanaconsumerwatch.blogspot.com
 
THE
 
CONSUMER
 
PARTNERSHIP
 
(GHANA
)
consumer 
 
education
 
is
 
self 
 preservation
 
       P     a     g     e
       3 
In
 
a
 
move
 
to
 
protecting
 
Ghanaian
 
consumers
 
in
 
Financial
 
Services,
 
the
 
Bank
 
of 
 
Ghana
 
(BoG)
vi
 
has
 
established
 
a
 
new
 
Investigation
 
and
 
Consumer
 
Reporting
 
Office
 
(ICRO)
 
within
 
the
 
Banking
 
Supervision
 
Department
 
(BSD)
 
as
 
the
 
financial
 
industry
 
watchdog
 
office
 
of 
 
the
 
Bank
 
of 
 
Ghana
 
(BoG),
 
with
 
responsibility
 
for
 
protecting
 
consumers
 
of 
 
financial
 
products
 
and
 
services
 
and
 
educating
 
them
 
on
 
their
 
rights
 
and
 
responsibilities.
 
While
 
this
 
effort
 
is
 
laudable,
 
the
 
government
 
must
 
be
 
moving
 
more
 
towards
 
state
 
sponsorship
 
of 
 
regulation
 
instead
 
of 
 
state
 
provision
 
since
 
this
 
prevents
 
duplication
 
of 
 
mandates
 
as
 
is
 
the
 
case
 
of 
 
this
 
new
 
ICRO
 
within
 
the
 
Bank
 
of 
 
Ghana
 
that
 
is
 
working
 
with
 
the
 
same
 
mission,
 
laws
 
and
 
regulatory
 
authority
 
in
 
all
 
matters
 
relating
 
to
 
banking
 
and
 
non
banking
 
financial
 
business,
 
that
 
is
 
 
Bank
 
of 
 
Ghana
 
Act
 
2002,
 
Act
 
612
 
 
Banking
 
Act,
 
2004
 
(Act
 
673)
 
 
Financial
 
Institutions
 
(Non
Bank)
 
Law
 
1993,
 
PNDC
 
Law
 
328
 
 
Companies
 
Code
 
Act
 
179,
 
1963
 
 
Bank
 
of 
 
Ghana
 
Notices
 
/Directives
 
/
 
Circulars
 
/
 
Regulations
 
Ghana
 
must
 
emulate
 
the
 
example
 
of 
 
the
 
US
 
in
 
moving
 
for
 
a
 
new
 
regulatory
 
authority
 
specifically
 
dedicated
 
to
 
the
 
protection
 
of 
 
consumers
 
of 
 
financial
 
services
 
in
 
the
 
form
 
of 
 
the
 
new
 
Consumer
 
Financial
 
Protection
 
Agency
 
(CFPA)
 
that
 
was
 
eventually
 
based
 
on
 
the
 
recognition
 
of 
 
the
 
vulnerability
 
of 
 
consumers
 
to
 
financial
 
services
 
that
 
are
 
‘Unsafe
 
at 
 
any 
 
Rate’ 
 
as
 
concluded
 
by
 
Elizabeth
 
Warren
 
in
 
her
 
treatise
 
in
 
a
 
2007
 
article
 
in
 
D
emocracy 
 
 Journal 
vii 
:
 
‘It 
 
is
 
impossible
 
to
 
buy 
 
a
 
toaster 
 
that 
 
has
 
a
 
one
in
 five
 
chance
 
of 
 
bursting
 
into
 
 flames
 
and 
 
burning
 
down
 
your 
 
house.
 
But 
 
it 
 
is
 
 possible
 
to
 
refinance
 
an
 
existing
 
home
 
with
 
a
 
mortgage
 
that 
 
has
 
the
 
same
 
one
in
 five
 
chance
 
of 
 
 putting
 
the
 
 family 
 
out 
 
on
 
the
 
street...
 
Similarly,
 
it’s
 
impossible
 
to
 
change
 
the
 
 price
 
on
 
a
 
toaster 
 
once
 
it 
 
has
 
been
 
 purchased.
 
But 
 
long
 
after 
 
the
 
 papers
 
have
 
been
 
signed,
 
it 
 
is
 
 possible
 
to
 
triple
 
the
 
 price
 
of 
 
the
 
credit 
 
used 
 
to
 
 finance
 
the
 
 purchase
 
of 
 
that 
 
appliance
 
...
 
The
 
difference
 
between
 
the
 
two
 
markets
 
is
 
regulation’.
 
The
 
ineffectiveness
 
of 
 
the
 
regulatory
 
role
 
of 
 
the
 
Bank
 
of 
 
Ghana
 
(BoG)
 
in
 
the
 
financial
 
services
 
sector
 
has
 
been
 
exposed
 
since
 
2004
 
when
 
it
 
directed
 
all
 
commercial
 
banks
 
in
 
the
 
country,
 
to
 
abolish
 
and
 
in
 
some
 
instances
 
reduce,
 
what
 
it
 
described
 
as
 
unfair
 
bank
 
charges
 
and
 
fees
 
being
 
charged
 
by
 
the
 
various
 
commercial
 
banks
 
operating
 
in
 
the
 

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