The Central Bank of Nigeria has instructed regulated entities to provide customers with notices of outstanding obligations before beginning debt collection.
This is to ensure that the debt recovery process is transparent, courteous, and fair.
CBN stated this in a document released on Thursday on its website titled “Revised Consumer Protection Regulations.”It noted that the essence of the document is to ensure financial institutions follow consumer protection principles.
The document states that foreclosures should only be initiated as a last resort after other recovery options have failed, adding that financial service providers must apply the net proceeds from foreclosures to the loan account and inform customers of the remaining balance.
The CBN added that banks must give customers a report on the collateral sale, stating process, expenses, and net proceeds noting that banks are responsible for the actions of debt collection agents.