The use of an alert system that flagged Twitter conversations on consumer protection topics, when they rose above certain thresholds, shows promise as a new consumer protection market monitoring tool that we could use in Kenya to address the substantial gaps in consumer protection monitoring and enforcement.
In our last blog post, we shared our experience using Twitter data to measure problems with financial services in Kenya. The use of an alert system that flagged Twitter conversations on consumer protection topics, when they rose above certain thresholds, shows promise as a new consumer protection market monitoring tool that we could use in Kenya to address the substantial gaps in consumer protection monitoring and enforcement.
But behind every Tweet, there is also a Kenyan consumer, and social media is an important tool for personal engagement with consumers alongside market-level data analysis. Already financial consumer protection agencies in other markets use Twitter accounts to handle consumer issues, such as the National Commission for the Protection and Defense of Users of Financial Services (CONDUSEF) in Mexico. In Kenya some financial service providers and government agencies in other sectors already receive and handle complaints via Twitter. However, this is not something we see being undertaken by financial sector regulators yet in Kenya, even when tagged onto consumer complaints on Twitter. Investigating and resolving these complaints takes considerable time and effort. Given the sheer volume of problems revealed by social media, it points to the need for significant dedicated capacity to do this. An approach which has been used elsewhere with considerable success is to establish a financial sector ombudsman. An ombudsman could address the numerous consumer complaints that currently go unresolved, and social media could be an effective tool to build a digital ombudsman to match our increasingly-digital financial sector.
@pesastory: A voice for consumer protection on Twitter
To test this concept, we created a Twitter account, @pesastory, which complemented the CitiBeats platform’s Twitter data analysis by provoking discussions on consumer protection and consumer experience with financial services in Kenya. @pesastory complimented the analysis of Twitter data in several ways:
- Previous analysis of Twitter threads had shown that when one Twitter user shares a problem with a financial service, other consumers often decide to share their story too, even if they previously had been silent about their experiences. By highlighting and amplifying individual cases via retweets and topic threads, we sought to encourage more consumers to share their stories.
- We imagined there would be some latent consumer stories that occurred before our pilot that we could bring out by soliciting experiences via twitter threads. Turns out we were right. Some Twitter users shared stories that were more than six months old where they were still waiting for a resolution from their bank.
- We wanted to create a trusted channel where we could then discuss consumers’ experiences in more detail via private Direct Messages or even in follow-up meetings and phone calls, as people do not always want to share all their details via public tweets. These personal conversations helped to probe the failures and breakdowns in complaints handling that we could not ascertain just from a single tweet.
To help amplify the engagement we partnered with Kellie Murungi, better known as @RookieKE, a leading voice for financial consumers in Kenya. Together, @RookieKE and @pesastory were able to lead several robust conversations with consumers on concerning consumer protection issues. The stories of consumers raised several concerns that should be improved immediately to increase the value of financial services for Kenyan consumers:
1. Hidden and excess charges. There have been discussions for many years in Kenya on hidden and excessive charges in financial services, and Twitter has become another channel through which these issues are being raised. Consumers commonly raised concerns about excess charges on activities such as balance inquiry through their Apps and USSD service, or the fact that you are charged a transaction fee. This was the most popular @pesastory topic. A thread facilitated by @Rookie_KE on this topic received a total of 49,116 impressions.
At the same time some customers also applauded banks that do not have hidden or unnecessary charges made to their accounts during transactions, such as this one customer of CBA Loop. This thread shows how Twitter users can be sharp price watchdogs, and it is easy to imagine this kind of information being useful for a consumer seeking to open a new mobile banking account given the history of hidden fees and charges in Kenyan banking.
2. Unauthorized bank debits. After a few weeks, @pesastory started to be tagged by some consumers when sharing issues they had with providers. This helped @pesastory to take one experience and then amplify it to both pressure for a response from the provider, and to see if others had similar experiences. For example, one Twitter user sent us a tweet of an unauthorised transaction done on his bank account. We shared this Tweet, and started a thread on this topic to get other responses, and the response clearly indicated that there is a recurring problem with unauthorised transactions. Overall, 669 people reacted to the tweet, and there were nearly 20,000 impressions of this tweet. These tweets point to serious concerns over internal fraud and identity theft, which have also been reported in the media, and a need for banks to take their data and account security obligations more seriously, as well as for regulators to do more to stop consumers from losing money when they decide to keep their money in a bank.
3. Digital lending. Some consumers reported they had been listed in credit bureaus for loans they never took from mobile lending platforms, and others were given a loan they never requested. The most egregious case was a customer who reported that he had never downloaded digital lender Branch’s app but was disbursed a Ksh2,000 loan, and forced to pay the loan back, despite this being a clear case of identity theft.
When this customer went to make an M-Pesa transaction in October 2018, he noticed that his balance was higher than expected. He checked his SMS records and saw he had been sent a Ksh 2,000 loan by M-Pesa from Branch, a digital lender, with an interest rate of more than 15% per month. However, he had never applied for a loan with the lender, in fact he had never even downloaded their app. The customer tried to find a way to get in touch with the lender, but they do not have a customer care line or a phone number. He finally found their Twitter account and sent a tweet, noting “I have received a branch loan of Kshs 2,000 today at 15:02. I have neither download your app nor requested for a loan from your service. Please take back the money you have deposited in my M-Pesa account immediately.”
During the customer’s exchange with the lender, he reported that they refused to answer questions he raised of how they could have gotten his information, and whether someone could have taken a loan in his name. He said that they also refused all his requests to reverse the transaction, and would not even remove his information from their database. Finally, the customer was forced to pay back the loan, plus interest, to avoid being listed in the credit bureau. It appears that someone was able to impersonate this customer’s phone line and borrow in his name – in other words he was a victim of identity theft. Despite this, he was pressured to repay the loan he never took or risk damaging his credit history. There was no agency to which the consumer could appeal.
4. Unsolicited SMS spam. A common privacy concern shared with @pesastory was promotional text messages (SMSs) that consumers get from third parties. Kenyan consumers flagged SMS they received from digital lenders, including those whom they have no relationship with. This unwanted SMS spam was a common complaint found in the CitiBeats data as well, and there is a need for more restrictive protections against unsolicited marketing in Kenya’s mobile communications space. Some consumers are also concerned about SMSs they get immediately they sign up for one mobile lending platform. The messages received are from other lending entities, a service that the consumer never subscribed to. This question the safety of consumer’s data that are in the hands of the platforms.
What will it take for consumers’ complaints to be heard?
The @pesastory experience demonstrates the range of problems that often go unresolved in financial services in Kenya. In reading many of these stories, a sense of sadness and frustration often emerges, when consumers suffer significant abuse but receive no resolution. With hidden charges, money literally disappearing from bank accounts, and identities being impersonated, it is no wonder some financial consumers are upset. But when they do not receive the redress they seek, there does not appear to be any third party that consistently takes an interest in their case and provides support. This is why Kenya badly needs dedicated, adequate capacity to address these issues. There is need for an authority with responsibility for receiving unresolved complaints from consumers, providing follow-up, and rendering binding decisions. Such an authority would go a long way to cleaning up the problematic practices in financial services that seem to make a new headline every week.
Establishing an independent financial sector ombudsman offers a way to tackle these negative practices. It has worked well elsewhere. It recognises that this is a specialised job and could ease the pressure on the current regulators, whose primary mandate and focus is necessarily (and correctly) on financial sector stability. By using Twitter and other social media as new channels of consumer engagement, and then following up through private communications, this ombudsman could quickly and efficiently identify and pursue problems on behalf of consumers, changing expectations and outcomes on consumer protection in Kenya’s digital financial sector.