Consumer Protection for Payment Service Users
Consumer protection is purposed at safeguarding users of services or products against unjust practices of service providers and other unfair market practices.
Quite recent, public spaces have been overtaken by the talk of the rampant fraud in digital payment systems. These are systems through which transactions are effected by transfers of money and include Mobile Money, Airtel Money, Agent Banking and other digital money-transfer means. There is little that is known by consumers of payment services about the extent of protection that the existing legal framework offers them. Questions of tracing financial transactions, financial crime and holding perpetrators accountable accumulate with the rapid technological advancement in money transfers. This same advanced technology has sophisticated tracing financial crime let alone the culprits.
The National Payment Systems Act 2020 governs payment systems right from their establishment to operation, further is their control by Bank of Uganda which is authorized with regulation, supervision of service providers and operators who in this case are the telecom companies, banks, and other operators.
The Act does not provide for avenues within which aggrieved consumers of payment services can seek remedies. However, it does give Bank of Uganda authority amongst which includes prescribing requirements for consumer protection which is yet to be realized.
Amongst the guiding principles to be followed by Bank of Uganda in prescribing rules for consumer protection is Accountability. In context of payment systems, the principle of Accountability is intended at holding operators of such payment systems accountable for the valid grievances that consumers of their services may have.
For instance, an individual who without giving authority to anyone nor acting negligently on his part realizes some of his money was deducted from his mobile money account should have someone to hold accountable. The obvious being the operator of the mobile money service or the payment service used.
Despite Bank of Uganda’s delay to issue guidelines for consumer protection regarding dispute resolution as mandated under the Act, users of such payment systems can address their grievances through the existing legal mechanisms such as negotiation, mediation, or conciliation all of which fall under Alternative Dispute Reconciliation (ADR).
Where there is failure in resolution through ADR, the aggrieved consumer can petition Bank of Uganda seeking its intervention as the regulator of the payment service operators. Upon dissatisfaction of the intervention of Bank of Uganda, the aggrieved consumer can proceed to institute legal proceedings in courts of law against the payment service operator since courts of law do have the mandate to provide all possible remedies to ensure that justice is delivered.