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1.0 Introduction

There is a wide arsenal of international instruments on consumer protection. These instruments include the following: At the sub regional level, the legal framework[1] governing the licensing of the activity of issuing electronic money defines the conditions required for the issue and withdrawal of the license as a well as the aims and scope of the initiative. This directive[2] establishes an obligation for telecommunication service providers to ensure the availability of vital communications opportunities to the greater majority. The essence of this legislation is to ensure that mobile telecommunication operators do not deprive the consumers of the vital communication needs.

In CEMAC like other countries, electronic money issuance is an activity which requires a partnership between banks the only parties permitted to issue e-money and mobile telephone operators to make the service accessible to their customers. This is why the legislative framework is dual; that is it concerns both the telecommunication and banking sectors and concerns not only the regional and the national level.

1.1 Sub-regional legislation for the regulation of mobile money services in Cameroon

1.1.1 Sub-regional legislation on banking services 2.1.1.1 Regulation n° 01/11-CEMAC/UMAC/CM of September 18, 2011, setting the conditions to exercise the activity of e-money issuer, and the roles of the regulatory authorities.

The legal framework governing the licensing of the activity of issuing electronic money defines the conditions required for the issue and withdrawal of the license as a well as the aims and scope of the initiative.

1.1.1.2 Order n° 01-GR of October 31, 2011, from the Governor of the BEAC on the monitoring of e-money payment systems.

This order defines the monitoring of payment systems; function of the central bank to promote the objectives of security and efficiency of payment systems by monitoring the existing systems by evaluating them with regard to these two objectives and by prompting, if necessary, the related changes.

Also, this order defines the organization and state the rules controlling payment systems used in CEMAC in order to guarantee the harmonious functioning security and efficiency. The control is intended to ensure the respect of technical, legal and functional norms defined in payment system referential. Finally; it applies to both endogenous[3] and exogenous control systems.[4]

1.1.1.3 Order 02/GR/UMAC of May 07, 2014, from the Governor of the BEAC on the implementation of multi-banking as part of the issuance of e-money.

This order sets the modalities for multi-banking in the context of issuing electronic money in CEMAC[5]. It determines in particular:

  • The terms and conditions of participation in multi-banking;
  • organization and operation of multi-banking;
  • The terms and conditions of clearing and settlement in the context of multi-banking;
  •  the management of the guarantee fund dedicated to the multi-banking activity;

Any subject institution with an authorization to issue electronic money who wishes to become a participant in a multi-banking network must request the prior approval of the regulator.

For this purpose, he lodges with the BEAC National Board in his country of establishment, against receipt of a request for an agreement to participate in a multi-banking network. This written request, sent by the legal representative to the Governor of the BEAC must clearly indicate the technical manager and the bank of the partners of this multi-banking project. It must be accompanied against rejection by the framework agreement of the signed copies of the “Technical Manager – Participant”, including its annexes and the Settlement Account Agreement.

Any subject institution that does not have an authorization to issue electronic money that wishes to be part of a multi-banking network must request the prior authorization of the regulator in accordance with Regulation n°01/11-CEMAC-UMAC of September 18, 2011, relating to the exercise of the activity of issuing electronic money.

In addition to the prescribed file, the applicant must also attach a copy of the proposed Technical Manager Certification, signed copies of the Technical Manager / Participant Agreement, including its annexes (Appendix) and the Settlement Account Agreement. The technical manager who wishes to set up a multi-banking network must first obtain a certification of the regulator valid only for the activity of issuing electronic money.

The certification is issued by Decision of the Governor of the BEAC. It does not confer on the Technical Manager the status of issuer of electronic money. The application file must include under pain of rejection:

  • A request addressed to the applicant’s legal representative to the BEAC Governor
  •  The documents establishing the qualifications and powers of the legal representatives
  •  The documents authorizing the technical manager to practice in its core business sector (operating license, approval, authorization, etc.)
  •  The documents justifying a financial and organizational capacity to efficiently manage the technical platform;
  • A copy of the framework agreement between the technical manager and the proposed settlement bank, including its annexes in accordance with the model validated by the regulator
  •  A presentation of the product indicating in particular the type of electronic instrument chosen, the technology used, the operating licenses of the software or software and any technical certifications already obtained ;
  • The presentation of the technical platform indicating the planned software and hardware architecture as well as the network and security architecture;
  • a note on the internal control system put in place to ensure the control of risks related to the activity;
  •   The procedures of all processes related to the operation of the multi-banking network;
  • The draft rules of procedure of the management committee provided for in this instruction.

1.1.2 Sub-regional legislation on telecommunication

1.1.2.1 Directive fixing the legal framework for the protection of the rights of users of communication services and networks within the CEMAC

This directive set out its object and scope of application and handles the protection of privacy of users, their rights and questions related to billing and costs of services. Other issues treated in this directive are related to the quality and availability of services, dispute resolution, treatment of personal data and directives related to cyber security and cyber criminality. This directive aim is to ensure that consumers of telecommunications services get the fairest deal, their privacy and security is well respected.13.1.2.2 Directive fixing the legal regime for universal service in electronic communication sector within the CEMAC

This text establishes an obligation for telecommunication service providers to ensure the availability of vital communications opportunities to the greater majority. The essence of this legislation is to ensure that mobile telecommunication operators do not deprive the consumers of the vital communication needs.

1.1.2.3 Directive n°08/UEAC/133/CM/18 related to interconnection and to ease access to the networks and services of telecommunication operators within CEMAC

This directive seeks to maintain fairness, equity, avoid unfair competition and abuse of consumer’s rights. The telecommunication operators have to agree on a lot of issues for interconnectivity to strive and be beneficial to all parties for example in network sharing, ratio and costs calculation. This directive’s aim is to ensure equity, fairness and avoid unfair competition and abuse of consumer’s rights.

1.2 National framework for the regulation of mobile money services in Cameroon

1.2.1 Law n° 2010/012 of December 21, 2010, on cyber criminality and cyber security in Cameroon

This law governs the security framework of electronic communications network and information systems, defines and punishes offences related to the use of information and communication technologies in Cameroon. It seeks to protect the basic human dignity, honor and respect of privacy. This law focuses primarily on security and cyber security essentially regulation of electronic security, electronic signature and certification, the protection of electronic communication networks, rules on privacy. It insists also on procedural aspects namely offences and penalties, international cooperation and judicial assistance.

1.2.2 Law n° 2011/012 of May 06, 2011, Framework on consumer protection in Cameroon

This law sets out to outline consumer protection principles on a global scale. Specifically, it handle chapter iv physical safety and environmental protection[6], protection of consumers economic and technological interests[7], consumer education, participation in decision-making[8], compensation for damage suffered by consumers[9] and penal provisions.

1.2.3 Law n° 2003/004 of April 21, 2003, governing banking secrecy

This law applies normally to bankers who are obliged to keep the duty of secrecy and shall be extended to other institutions like MNO on one hand[10], retailers, agents because they are in contact of confidential information of their customers and are obliged to preserve the privacy and confidentiality of their customers[11]. This law makes a distinction between confidential[12] and non-confidential information[13]. This law also has provided punishment for the violation of bank secrecy.

1.2.4 Law n° 98/014 of July 14, 1998, on telecommunications in Cameroon This law shall govern telecommunication in Cameroon. To this end, it shall lay down the conditions for the installation, exploitation and balanced development of telecommunications. This law aims at enhancing the harmonious development of telecommunications networks and services with a view to ensure the contribution of this sector to national economic development and satisfying the numerous needs of users and the population.

1.2.5 Law governing electronic communications in Cameroon

The Law governing electronic communications in Cameroon main objective is to promote harmonious and balanced electronic communication coverage on the national territory and ensure modern and efficient services in quality and quantity accompanied by affordable costs to all classes of the population.

1.2.6 Law n° 2006/018 of December 29, 2006, governing advertising in Cameroon

Operators under foreign law wishing to engage in any advertising activities within the territory of Cameroon must complete a representation agreement for such purpose with an operator under Cameroonian law duly authorized to practice the advertising profession in question.

To present its messages to the public, advertising makes use of media and non-media resources.

Media resources include the following: the print press, radio broadcasting, television broadcasting, and movies, outdoor posting of notices, internet sites and online journals, illuminated signs, advertising on cars or any similar procedure, any other procedure of the same kind resulting from the progress of technology in the domain of communication.

Non-media resources include the following: event-related advertising, point-of-sale (POS) promotion, cell phone networks, electronic messaging, any other tool or vehicle of direct marketing, any other procedure of the same kind resulting from the progress of technology in the domain of communication.

The content of advertising messages must be in accordance with the requirements of decency, morality and truthfulness. It may not undermine the credit of the State, or the values and traditions of national culture. Advertising messages should be free of any racial, ethnic or sexual discrimination, scenes of violence and any incitation to behaviors injurious to health, the security of property and persons or protection of the environment.

 Advertising messages must not contain any element of a kind that clashes with the political or religious convictions of consumers. For minors, advertising must not under any circumstances exploit the inexperience or innocence of children or adolescents, or the fragility of handicapped persons or any other person who is vulnerable because of his physical or mental condition.

1.2.7 Law n° 2015/018 of December 21, 2015, to regulate the conduct of commercial activities

This law advocates two mechanisms of protection against contractual imbalance with the supplier being the dominant party. The classical protection is proposed by the autonomy of the will and the intervention of the state. It provides weak professionals and consumers with preventive instruments aimed at reinforcing their consent, while at the same time introducing remedies against abuses of weakness.

1.2.8 Decree 2012/1640/PM of June 14, 2012, fixing the conditions for interconnection, access to electronic communication network open to the public and the common use.

This decree provides that telecommunication service providers open to the public must be transparent and non-discriminating to their customers when providing universal services and offer equal or fair treatment to all their customers.

1.2.9 Decision n°000098/ART/DG/DAGJI of July 31, 2008, bearing on the framework for settlement of disputes within telecommunication sector in Cameroon.

This decision provides that all telecommunication operators in Cameroon have the obligation to put in place an effective structure capable of receiving and dealing with the complaints of consumers within a reasonable time.

These legislations are a model which can help governments to follow and draft their legislation and policies at their respective national level. Also, they recognize a number of protections to the consumer like the right to satisfaction of basic needs, right to safety, right to choice, right to information, right to consumer education, right to redress, right to representation and right to healthy environment.

1.3 INSTITUTIONAL FRAMEWORK FOR THE REGULATION OF MOBILE MONEY SERVICES IN CAMEROON

The function of consumer of mobile money services protection falls within the purview of both public and private bodies and may be conferred by specific laws or assumed by them through virtue of their status. The following bodies play a role in consumer protection: the government agencies and consumer associations. In Cameroon, government agencies responsible for regulation of mobile money services are the Telecommunication authorities, the commerce authorities, the banking authorities and consumers protection associations.

1.3.1 1 Telecommunication authorities

The telecommunication authorities who are responsible of protection of consumers of mobile money services are the Ministry of post and telecommunications and the Telecommunications Regulatory Agency (TRA).

1.3.1.1 Ministry of post and telecommunication

The telecommunications sector in Cameroon, liberalized by the law of July 1998 allowed the entry of two private mobile operators alongside the incumbent fixed telephony. This law also established the creation of a regulatory authority (the Telecommunications Regulatory Agency), to guarantee and ensure the regulation, control and monitoring of the activities of operators in this sector.

Management of Posts and Telecommunications of Cameroon is under the responsibility of the Ministry of Posts and Telecommunications (MINPOSTEL). The opening of the telecommunications market has been entrusted in 1998 to the Telecommunications Regulatory Agency (TRA) which regulates the market and grant licenses.

The Ministry of Posts and Telecommunications (MINPOSTEL) is responsible for the development and implementation of government policy on posts, telecommunications and information technology and communication.

In this regard:

  • It implement, he studies and ensures the production of equipment and infrastructure related to the sectors of Posts and Telecommunications.
  • It ensures the development of Information Technology and Communication (ICT) and electronic communications in any form in connection with the administrations concerned
  •  It promotes investment in the sector in relation to the Ministry of Economy, Ministry of Planning and Regional Development and concerned agencies
  • It ensures the training and formation of the staff of his sector
  • It follows up the activities of mobile telecommunications companies
  •  It follows the activities related to e-commerce and issues
  • cyber security and cybercrime in conjunction with the Administrations concerned
  •  It develops, and maintains statistical analysis relating to the areas of Posts and Telecommunications and Information Technology and Communication (ICT)
  • It follows the activities of regulation agencies involved in its jurisdiction
  •  It liaises between the Government and the Universal Postal Union (UPU) and with the International Telecommunication Union (ITU) in conjunction with the Ministry of Foreign Affairs.

1.3.1.2 Telecommunication Regulatory Agency (TRA)

The Telecommunications Regulatory Board (TRA) was created by Law 98/014 of July 14, 1998 to regulate telecommunications in Cameroon. Consumer’s protection is one of its activities. The regulatory organ assumes a protective role as regards to consumers of electronic communication with respect to the quality of services. TRA is an administrative public establishment with legal personality and financial autonomy whose organization and functioning are specified in the provisions of decree 98/197 of September 8, 1998. TRA has its headquarters in Yaoundé and three Regional Delegations in Yaoundé, Douala and Garoua.

TRA mission is to ensure the regulation; control and monitoring of the activities of providers and operators of the telecommunications sector and also sees to the respect of equity in the treatment of users.

Section 5 (1) of 1998 Decree states that two representatives of users of telecommunication services sit on the board. Some major strides include the putting into place of a numbering plan with nine digits, approval of interconnection catalogs, reduction and harmonization of tariffs and billing, the organization and planning of frequency attributions, the management of conditions for acquisition of mobile stations and spectrum control, the publication of a universal directory of users, impartial and consensual dispute settlement[14]. Also, the telecommunication regulatory board has the mission to verify:

  • The control of the quality of service, that is to see if the emission and reception from homologated terminals are of the best possible quality and do not cause disturbance to users.
  • The control of tariffs, that is to verify if the cost of production and profit margins are not excessive or abusive;
  • The treatment of consumers complaints, that is the TRA has to verify if the fixing and correction of faults and malfunction are done within reasonable time and in case of overbilling of airtime attribution failures, solutions are provided adequately ;
  • The availability of services on the whole zone covered by the different networks and in the quality and diversity required.

1.3.2 The commerce authorities

The central administration of the ministry of commerce includes:

  • The general secretariat
  • The directorate of internal trade
  • The directorate of foreign trade
  • The directorate of the protection of consumer
  • The general affairs directorate.

Placed under the authority of a director, the directorate of the protection of consumer is responsible for:

  • Of elaboration of legislation and regulation of prices, of metrology and the protection of consumer.
  • Collection, treatment and diffusion of information relating prices, of metrology and the protection of consumer. It is composed also by: [15]
  • The standardization cell and consumer protection cell. Placed under the authority of a cell leader, the standardization cell and consumer protection cell is responsible of:
  •  Collection, treatment and dissemination of information on consumer protection
  • Monitoring of national and international organizations on consumer protection
  • The census and supervision of the legalized organizations of consumers[16] .

1.3.3 Banking authorities

Mobile money in CEMAC is different from that adopted in Kenya. The architecture of mobile money in CEMAC is based on a model called bank centered. Where commercial banks are the issuers of electronic money and mobile network operators are the technical partners in charge of the distribution. This system is different from the non-banking system where it is possible for an entity other than a bank (a mobile network operator) to issue electronic money. It’s the case of Kenya for example where Safaricom is the issuer of electronic money used as part of the service M-Pesa. However, it should be noted that whatever system is adopted, it is always a central bank that is in charge of the legal guardianship of the mobile money activity in CEMAC which is BEAC. The central bank is responsible for the issue and withdrawal of the license as a well as the aims and scope of the initiative.

1.3.3.1 Conditions to obtain a license to issue electronic money

The institution must qualify as a credit institution. Under the Convention on the Harmonization of Banking Rules in CEMAC[17], a credit institution is an institution that habitually carries out banking operations. Not only the conditions relating to capacity, the institution must obtain the prior authorization of BEAC and file an application to the National Head Office of BEAC in the country, seat of the activities of the applicant. The said application file for authorization must be deposited in two copies against acknowledgement of receipt, at that National Head Office of BEAC.

In addition to a business plan, technical details, summary procedures and an internal control mechanism for activity related risks; the application file must comprise the following:

  • A written application by the legal representative addressed to the Governor of BEAC;
  •  Documents that proof the capacity or powers of the legal representatives;
  •  Detailed description of proofs of the relationship between persons involved in the process of issuing electronic money, showing links of participation in the capital;
  •  A draft copy of the technical/financial partnership to be entered into for the issuing of electronic money;
  •  A draft copy of the different agreements to be entered into with traders or merchants and electronic money distributors;
  • A draft copy of the different agreements to be entered into with businessmen or people who accept electronic money;
  •  A draft copy of contracts to be entered into with electronic money subscribers. The business plan of the activity of issuing electronic money must comprise especially:

A presentation of the product especially:

  • The target public and area/place of availability and use of the product;
  •  Characteristics of each type of electronic instrument chosen;
  •  Method of charging the electronic instrument;
  • The transaction ceiling of accepting service providers;
  •  The duration of validity of the electronic instrument; A presentation of the technical details showing:
  •  Details of the intended software and material;
  •  Network and security architecture;
  •  A summary of procedures;
  •  Aimed at ensuring the availability and security of the system;
  •  The management/administration of relations with bearers and distributors;
  • Account management of the flux of electronic money between the issuer and the bearer on the one hand and the issuer and the distributor on the other;
  • The management of payment hitches;
  •  Loss management of electronic money accessories;
  • A note on the internal control plan of action to ensure a mastery of activity-related risks.

Furthermore, BEAC may request all other information that is complementary to the file.

1.3.3.2 Procedure for the Assessment of the application file

The Governor of BEAC may issue the authorization after the opinion of the Technical Committee[18] has been obtained. BEAC accordingly notifies the applicant institution with regards to the authorization, copies of which are sent to the Monetary Authority of the country of the applicant, the relevant BEAC national headquarters and COBAC and published in the Official Gazette of the country that is seat of the applicant’s institution as well as in at least one national newspaper of official announcements in the country that is seat of the institution. Refusal to issue the authorization is equally duly justified and notified to the applicant by BEAC.

1.3.3.3 Procedure for the withdrawal of license

The Governor of BEAC may withdraw the authorization in the following cases:

  • At the behest of the institution concerned;
  • If seized by COBAC;
  •  If the institution has not exploited its authorization within 12 months deadline or failed to pursue its activity for six months;
  •  When conditions for the pursuit of the activity are no longer met.

Once BEAC decides to withdraw an authorization from an institution, the latter must be notified as well as the competent Monetary Authority, the National Head Office of BEAC and the Secretary General of COBAC. Furthermore, the decision to withdraw the authorization must also be published in the National Gazette and in at least one national newspaper of official announcements in the country where the credit institution has its seat. The withdrawal of the license of a credit institution or Micro finance institutions (MFI)[19] , automatically has consequences that include the withdrawal of: the license to pursue the activity of issuing electronic money, the cessation of the pursuit of the activity of issuing electronic money and the striking off of the concerned institution from the list of licensed institutions. The concerned institution also has the duty to refund all due units of electronic money in conformity with the electronic money regulation[20].

1.4 Banks

The role/responsibilities of banks as Scheme Operators shall include:

  • Provision of all financial services for the operation of the mobile payments service.
  • Verification, approval and accountability for the credibility and integrity of their partner organizations.
  • Seeking and obtaining necessary approvals from relevant regulatory authorities.
  • The deployment and delivery of the mobile payment services to the customer.
  • Ensuring that the mobile payment service meets all specified mobile payment standards as provided in this Guidelines.
  • Putting in place adequate measures to mitigate all the risks that could arise, following the deployment and use of its mobile payment service.
  •  Facilitating remittances to both scheme and non–scheme recipients.
  •  Providing financial, clearing and settlement services to the mobile payments system.
  • Educating the customers on the appropriate use of the service and ensuring the deployment of adequate channels for enquiries and complaints.

1.5 Mobile network operators

Their role shall be guided by the following provisions:

  • Providing telecommunication network infrastructure for the use of Mobile Money Operators;
  • Ensuring that a secure communication channel based on the minimum technology standard stipulated in this Guidelines are implemented;
  • That MNOs shall not give preferential treatment to any mobile money (MMO) over another in terms of traffic and price.
  • Ensuring that its customers are free to use any mobile payments scheme service of their choice;
  •  Shall not receive deposits from the public, except in respect of the airtime billing of their customers;
  • Shall not allow the use of the airtime value loaded by their customers for purposes of payments or to transfer monetary value;
  • Shall ensure seamless interconnection between MMOs; and
  • Shall not engage in any conduct which has a purpose or effect of anti-competition in any aspect of mobile money services.

1.6 Consumers

They shall have rights/responsibilities as follows:

  • Ease of enrolment.
  • Ease of use (SMS, USSD, STK, IVR, etc.).
  •  Privacy, Trust and Security of transaction.
  •  Convenience.
  • Consumer education and information on prices, quality, availability of services.
  • Accessibility to funds on completion of transaction process.
  • Real time transfer of value.
  • Easy and prompt access to dispute resolution process.
  • Ensure the protection of PIN / Password.
  • Ensure prompt reporting of fraud cases, errors and complaints.
  •  Ensure proper confirmation of transaction details and recipients’ mobile phone numbers at all times before authorizing transactions.
  •  Comply with all security rules as provided by the scheme operator[21] .

[1] Regulation n° 01/11-CEMAC/UMAC/CM of September 18, 2011, setting the conditions to exercise the activity of e-money issuer, and the roles of the regulatory authorities

[2] Directive fixing the legal regime for universal service in electronic communication sector within the CEMA.

[3] Monitoring of endogenous payment systems refers to control mechanisms which enable the central bank to ensure that the payment systems whose operational management it operates respect the fundamental principles inherent in a systemically important payment system.

[4] Oversight of exogenous payment systems refers to controls that allow the central bank to ensure that payment systems that it does not manage in an operational way also respect the fundamental principles inherent in a systemically important payment system.

[5] Multi-banking: a system that allows institutions that issue electronic money with the same technical manager to form an interoperable network on a single technical platform.

[6] Cf. The framework law on consumer protection in Cameroon, section 4 to 14.

[7] Ibid, Section 15 to 24.

[8] Ibid, Section 21 to 25.

[9] Ibid, Section 26 to 31.

[10] The Law n°2003/004 of 21 April 2003 governing banking secrecy section 4 (1).

[11] Cf. Law n° 2003, section 4 (2). Ibid.

[12] These are information which are related to the precise data relating to the privacy of the customer’s business, of his fortune, of the private life of the person concerned; precise data such as those relating to figures, the existence of an account, its balance, its movement or the detail of the writings. Cf. Law n° 2003, section 5.

[13] Non-confidential information refers to general information. Cf. Law n° 2003, section 6.

[14] KINGA HELEN KIMAH, op cit., p. 40.

[15] Cf. the Decree n° 2005/089 of March 29, 2005, on the organization of Ministry of commerce, article 39.

[16] Ibid, cf. Article 47 of the Decree.

[17] Cf. Annexe to the Convention of January 17, 1992, Article 4.

[18] Made of BEAC experts, the Secretary General of COBAC and the organ responsible for the regulation of electronic money activities in CEMAC

[19] MFI: Micro finance institutions.

[20] Cf. COSMAS CHEKA (2017), “What does ‘money’ mean and who issues it in the digital age under Cameroonian law?” website: www: academia.eduprofile.

[21] 4 Robin SIMPSON, Marisa HENDERSON, Graham MOTT, Maria BOVEY and Arnau IZAGUERRI (2016), Manual on consumer protection, United Nations conference on trade and development (UNCTAD), Edition 2016, Advance copy, p. 9.

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