Nicaragua has made significant strides in consumer protection and financial inclusion since 2005. One of the first steps in this process was when the Superintendence of Banks and Other Financial Institutions (SIBOIF) sought to take control of the issue of consumer overindebtedness in credit cards. This was achieved by requiring credit card companies to consider and adjust to the profile individual consumers before offering them a credit card, and developing a procedure to resolve problems arising from credit card use. Acting as a mediator to apply the law and its regulations and, at the same time, educating and promoting equitable treatment between providers of credit cards and their clients has been quite a difficult task.
Although initially there was no specific plan to provide financial education to users, specifying the rights and obligations of each party has been intrinsic to the roles of the supervisors and regulators. The national publicity we received when we launched this complaints channel for credit cards spurred an immediate and considerable number of complaints regarding the use and management of credit cards. Most of the complaints came from people living in the country’s capital and nearby departments (where most of the population has ready access to information from the media).
Photo Credit: AM Asad
We gradually expanded the credit card complaint system and created a website so that people throughout the country could access to issue complaints or ask questions. This measure was effective, but not sufficient, and so we continued to seek to optimize our resources to reach geographically remote populations. In addition, onsite inspections of the financial services entities indicated that consumer protection efforts on their part were somewhat lacking. To remedy this, we instructed the supervised entities to increase dissemination of the complaint response system put in place by law, control and monitor each case presented to the provider, increase response time, ensure that information about the use and management of the different types of cards offered by each authorized entity was posted to their website, respond to questions posted online, and, despite virtual communication with customers via their website, improve personal attention, because in our financial culture most people prefer personal attention.
With respect to “inclusion,” the National Commission for Microfinance (CONAMI) was established by law in 2011 as a regulatory and supervisory body to serve the providers of this type of specialized service and their clients. CONAMI has been working closely with SIBOIF, allowing it to gain invaluable experience throughout this transition by reducing startup and structuring time, which is a quantitative and qualitative benefit for both users and financial service providers.
In June 2013 our mandate for complaints was broadened by Law No. 842, “Law for the Protection of Consumers’ and Users’ Rights." This law has made it possible to establish new rules for the relationship between financial services providers and users: in general, we have defined the rights and obligations of both parties, abusive clauses, new rules for contracts, interpretation of general conditions, electronic transfers, and we are readdressing the subject of credit cards and the procedures for complaints regarding financial services more broadly. Many aspects of the experience of developing the complaint system for credit cards have been adapted and improved for application to general complaints by users of the financial services system.
By legislative mandate there is now an office to provide services to users of financial services, which I currently head. This office was created as a part of SIBOIF and is in charge of the implementation, application, and enforcement of Law 842 and its Regulations. It is a great challenge for the country, the institution, and me personally to initiate a system that recognizes, serves, and resolves problems of financial service users with quality and cordiality. We want Nicaragua to have a reliable, secure, and fair system. We are ready and willing to seek improvements every day in our system for care and protection of financial service users.
Breyassis Gómez Mercado works for the Superintendencia de Bancos y de Otros Instituciones Financieras in Nicaragua.