Consumer Protection Diagnostic Study
This report analyzes key financial consumer protection issues in Kenya. It observes that the financial sector regulators provide incomplete consumer protection to clients of regulated institutions. As a result, Kenya falls short in providing comprehensive financial consumer protection.
The report notes that the financial sector regulators responsible for oversight of mass market services have adequate authority to improve financial consumer protection. It recommends creation of a harmonized protective regime in the following core areas:
- Minimum disclosure requirements for pricing and plain language in contracts;
- Minimum requirements for provider level dispute resolution mechanisms and independent third-party recourse;
- Regulations that clarify provider liability and responsibility for oversight of third-party agents who play a role in service delivery;
- Public reporting of provider performance in basic areas.
The report suggests that an incremental approach offers the best way to build effective financial consumer protection. Enhanced consumer awareness and financial education are required for the incremental approach to succeed, otherwise improvements in regulation and industry practices will not have their intended effect.
