The rapid growth of new technologies and digital financial services has led to tremendous benefits for consumers, providing ease of access and inclusion to people from all walks of life. At the same time, the risks related to the financial services have become more pronounced and consumer protection is now a basic regulatory enabler for digital financial inclusion. When legal frameworks that protect consumers are in place, consumers are able to trust and increase their usage of formal financial services.
Seychelles has undertaken important measures in this direction to enhance protection of financial consumers, and the Financial Consumer Protection Act, 2022 (the FCPA) came into operation last year. The FCPA seeks to provide a legal framework to fairly and reasonably handle financial consumer disputes and to promote the development of the financial sector in Seychelles.
The FCPA applies to financial service providers in Seychelles, including but not limited to banks, bureau de change, credit unions, payment service providers, mutual and hedge funds, securities dealers, investment advisors, securities exchanges and insurers; and the Central Bank of Seychelles (CBS) and the Seychelles Financial Services Authority (FSA) have been designated as the competent authorities with the objective of promoting and advancing the welfare of financial consumers in Seychelles.
The FCPA lists the obligations and duties of the financial services providers to provide their services in a transparent and equitable manner; and requires them to provide to all consumers, in writing, all terms and conditions of the services or products. It makes provisions in respect of unfair contract terms, unfair or abusive practices, and abusive collection or debt recovery practices by financial services providers. Notably, the FCPA also covers protection of data and requires a financial services provider to protect the confidentiality of non-public consumer data; and to ensure that the data is utilised only for the purposes specified and agreed to by the financial consumer or as required by law.
All financial services providers are now mandated to establish an internal complaint handling unit to receive complaints from financial consumers; and to inform the consumers of the procedure to appeal or to further pursue a complaint in the event of an adverse decision. The FCPA also requires the competent authorities to establish complaint handling mechanisms and empowers them to make appropriate orders to remedy the violation of the provisions of the FCPA on an application from an aggrieved person.
There is no doubt that a strong financial consumer protection regulatory framework is crucial to a country’s financial stability and maintaining consumer trust and confidence in the financial system. The FCPA is definitely the right step forward, and signals Seychelles’ commitment towards becoming a responsible and responsive digital economy.
For further information, please contact:
Jyotika Kaushik, Appleby