Global: Fintech Association for Consumer Empowerment Enhances Consumer Protection with New Code of Conduct

The Fintech Association for Consumer Empowerment (FACE) has introduced an updated code of conduct aimed at reinforcing consumer protection measures within its member companies and the broader digital lending sector.

FACE serves as the industry body representing digital lenders operating within regulatory boundaries. It is committed to advocating for customer empowerment and acting as a collective voice for the digital lending ecosystem.

Shortly after its establishment in September 2020, FACE took proactive steps by developing a Code of Conduct in December 2020 for its members, anticipating future regulatory requirements. As the digital lending landscape has rapidly evolved, including the issuance of digital lending guidelines (DLG) in September 2022, there has been growing consensus among stakeholders about the necessity of forming an industry self-regulatory organization (SRO).

The Rationale for Updating the Code

Members of FACE acknowledge the significance of agility, innovation, and customer-centric approaches in the ever-changing financial services sector. With this awareness, they have collaboratively worked on enhancing the code to align with evolving consumer and stakeholder expectations. This process involved comprehensive feedback and collaboration among members, stakeholders, and global best practices.

The updated code places a strong emphasis on customer protection, emphasizing principles of fairness, good faith, and reasonableness. It introduces an ‘Adherence Framework’ for member companies and FACE itself, outlining responsibilities for ensuring compliance. This framework complements existing regulatory standards and establishes clear, measurable rules for all market participants. Member companies are obligated to implement and adhere to the code within a three-month timeframe.
Ram Rastogi, Chairman of FACE, stated, “Regulators are clearly encouraging the establishment of a Self-Regulatory Organisation (SRO).

Our revised Code, operating within the regulatory framework, represents a robust self-regulation standard committed to advancing consumer interests and shielding them from harm and risks in a rapidly evolving market.”

The Fintech Association for Consumer Empowerment (FACE) has outlined essential principles in its updated code, focusing on fair and responsible practices within the digital lending sector. Inclusivity serves as a foundational principle, necessitating non-discriminatory lending models that treat consumers with integrity, empathy, and respect. Appropriateness underscores the prudent collection and use of consumer information to provide credit services that prevent excessive indebtedness.

Transparency is a pivotal pillar, requiring that all contractual information, terms, and repayment methods be clearly and unambiguously communicated in the consumer’s chosen language. Privacy guidelines emphasize the collection of only necessary consumer data for explicitly stated purposes. Responsible advertising is encouraged, with a focus on consumer education and avoidance of misleading claims.

Efforts to facilitate amicable repayments and convenient payment methods are highlighted in the recoveries section, prioritizing consumer convenience. Lastly, the code underscores the importance of a user-friendly redressal mechanism and consumer education about their rights and responsibilities. These guidelines collectively promote ethical and consumer-centric practices within the digital lending industry, fostering fairness, transparency, and accountability among member companies while safeguarding consumer interests and dignity.