CBN Consumer Protection: Unfair Loan Terms Explained What Loan Apps Don’t Want You to Know

UNFAIR CONTRACT TERMS: Contracts between Institutions and consumers

shall not contain unfair terms. Contract terms shall be considered unfair where there is an imbalance in rights and obligations which are detrimental

to the consumer.

Without limitation to the general meaning of an “unfair contract term”, a

contract term is considered unfair if it:

a. Eliminates or limits the liability of an Institution to loss caused to a

consumer by misrepresentation, negligence or misleading information

on its products or services.

b. Binds a consumer to an obligation while the corresponding obligation

on the Institution is conditional.

c. Terminates a contract or alters its clauses without reasonable notice

to the consumer.

d. Eliminates or limits Institution’s liability with respect to actions or

commitments undertaken by their employees, agents or

intermediaries.

e. Allows the Institution the possibility of transferring its rights and

obligations under the contract, where this may reduce the rights of

the consumers, without their consent.

f. Eliminates or limits the right of consumers to seek legal redress in the

event of a breach.

g. Allows unilateral change to a contract without stating the

circumstances under which the change could be made.

h. Purport to waive any protection provided by a law, regulations or

guidelines.