NIGERIA Law and Practice Contributed by: Isa Alade, Seyi Bella, Ayodele Adeyemi-Faboya and Ayomikun Ogunkanmi, Banwo & Ighodalo
12.3 Responsibility for Losses The CBN’s Consumer Protection Regulations 2019 require financial institutions to avoid unfair contract terms that limit their liability to cus - tomers. This means that if fintech’s actions or negligence leads to customer losses, they are responsible for compensating the affected cus - tomers. Additionally, the FCCPA empowers the FCCPC to enforce consumer rights, including the right to fair treatment and protection from unfair prac - tices. fintech companies must adhere to these standards to avoid legal repercussions. Specific situations where Nigerian fintech ser - vice providers could be held responsible for losses suffered by a customer are as follows. Negligence in Service Delivery If a fintech company fails to meet its duty of care in providing services, such as failing to ensure secure transactions, leading to financial loss (e.g., unauthorised transactions or cyber theft), the company could be liable for the direct finan - cial losses caused by its negligence. They may be required to compensate the customer for the full loss amount. Breach of Contract or Unfair Terms If the fintech service provider has breached its contract or included unfair terms in agreements that limit its liability to the customer, it may be lia - ble for the losses. For example, if the terms allow the company to avoid responsibility for certain failures, and those failures result in customer loss, the company may be held accountable.
Failure to Provide Accurate Information If a fintech service provider offers misleading or inaccurate information that leads the customer to make poor financial decisions or incur losses (eg, incorrect data about investment opportuni - ties), the company may be held liable. Failure in Safeguarding Customer Funds If a fintech platform negligently fails to secure customers’ funds or personal data, leading to fraud, hacking, or theft, it would be responsible for those losses. This includes failure to imple - ment robust cybersecurity measures. Violation of Consumer Protection Regulations Under Nigerian law, particularly the FCCPA, fin - tech companies must not engage in unfair trade practices or violate customer rights. They could be held liable if they fail to adhere to consumer protection laws and cause harm to the custom - er (such as charging hidden fees or withholding funds unfairly). Failure to Resolve Queries If a customer suffers losses and the fintech com - pany fails to address complaints or resolve que - ries properly, especially when the service was defective or the customer was charged incor - rectly, the company could be held liable. Breach of Data Protection Laws If a fintech company violates data protection laws, such as the Nigerian Data Protection Act, by mishandling a customer’s personal data, leading to identity theft or financial loss, it could be held responsible.
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