Even though there was no specific regulation on consumer protection, but Article 2.5 of the Regulation 2000/8 on Bank Licensing and Supervision prohibited person to make a misstatement of material or fact or false representation or do anything to create a false appearance or engage in any manipulative device or practice in relation to taking of deposit. Moreover, under Instruction CPO/B-2001/3 Notification of Term and Condition of Deposit and Credit, Instruction N0.01/2013 on the Licensing and Supervision of Money Transfer Operators (MTOs), Instruction No.6/2010 on the Licensing and Supervision of Other Deposit Taking Institutions (ODTIs).

The BCTL is working out on banking law that shall accommodate more provision on basis consumer right, roles of supervisory oversight, and uniform template of disclosures and transparency including financial literacy obligation to license financial institutions to inform about their services and product including fees and charges that applying by each licensed financial institution in Timor-Leste. The BCTL continue work on reviewing public instruction to enhance consumer due diligence process as well as public disclosures requirements, consumer complain handling mechanism, enhancing capacity, skill, knowledge of staff, developing online tools that allow consumer to present complain to the BCTL directly.

Under existing BCTL’s Instructions mentioned above, all financial institution is required to disclosure and make accessible to public information relation to product and services offered, pricing (fees and charges apply), and term and conditions. It deems necessary to expand the requirements to cover three importance provision mentioned such local language, literacy, testing product, and internal dispute resolution. It is proposed to engage with each of the different categories of financial institution (banks, ODTIs, insurers, and MTOs) regarding consistent application of principles of fair and ethical conduct in dealing with customers. It is necessary to enhance capacity of tools for monitoring oversight financial institution in order to make sure that financial institution is complied with consumer protection policy in term of transparency, fair treatment, and effective handling consumer complaint.

The BCTL has in place a proceeding manual to deal with non-compliance case by financial institution. Under this guideline, any proceeding to be initiate against a license financial institution if found that violation of regulation taking place. This including process to determine level of noncompliance, notification of violation and providing 15 days to present plea. Financial service provides must provide response to complainer first. In the case of unsatisfied and/or serious violation of market conduct then the BCTL will take further inspection process.

In term of electronic Payment, Article 29 and 31 of Law No.5/2011 Organic Law of the BCTL given special authority to the BCTL to regulate and supervise financial institution and national payment system as well as power to take appropriate corrective measurements. Moreover, Article 3 of Decree Law 17/2015 of June 14; provide exclusive authority to the BCTL to define policy on national payment system. Event though, there was not yet established a specific policy on digital financial services, but Chapter IV of Guideline of Usage of Agent for Branchless Banking established the minimum requirement consumer protection against risks of fraud, loss of privacy and loss of service. It is also set up disclosures requirements such as list of banking services offered by agent, term and conditions, fees and charges applying, and dedicate phone number to facilitate communication if consumer wishes to contact bank. Currently, the BCTL work on regulation on electronic funds transfer and oversight of payments and settlement system.

In the longer term, consideration will be given to establishing accessible and cost-effective means by which disputes between financial institutions and their customers can be independently resolved, say, by using a financial ombudsman or disputes tribunal approach. The latter is something that will need to be considered in the context of wider development of Timor-Leste’s court and disputes resolution arrangements.