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 regulations outline consumer rights and aim for better outcomes and access to financial services.
The document states that foreclosures should only be initiated as a last resort after other recovery options have failed.
Foreclosure is the legal process in which the ownership shifts to the bank or lender if the debtor fails to pay the loan.
“Customers should be given the option of a private sale before foreclosure, which must be exercised within 30 days unless the customer has waived this right,” the document stated.
The apex bank further mandated that financial service providers must apply the net proceeds from foreclosures to the loan account and inform customers of the remaining balance.
