Have consumer protection regulatory bodies and role players adopted adequate and sufficient measures to develop, promote and provide financial education during the COVID-19 pandemic? That was the question debated at a webinar presented by Ombudsman: Consumer Goods and Services Ombud, Ms Magauta Mphahlele.
Themed: The Importance of Financial Education in Enhancing Consumer Protection in South Africa, the webinar was the latest in an ongoing series hosted by UKZN’s School of Law.
‘COVID-19 is a severe test on individual financial resilience but also an opportunity to re-focus on the essential elements of financial literacy, said Mphahlele. ‘Sometimes, I do find that a lot of information out there, especially that which is given by regulators, is biased instead of giving consumers balanced information to make informed financial decisions.’
The presentation focused on the initiatives and work done by role players such as the National Credit Regulator (NCR), the Financial Sector Conduct Authority and the National Consumer Tribunal in the area of raising awareness about financial education.
Mphahlele said people were struggling with over indebtedness during the pandemic due to the high cost of living.
‘What we do is create awareness but we are not creating financial capability. Over indebtedness has not declined despite awareness campaigns which shows that we can’t look at financial literacy as a tick box exercise,’ said Mphahlele.
She said while reports showed that these organisations were active in creating awareness about the importance of financial education through digital campaigns, messaging was not realistic for the financial issues people faced.
Mphahlele asked: ‘How can we educate people to save money when they are fragile due to the pandemic and functioning on empty stomachs? Our messaging should be sensitive to people’s circumstances, which means that we are giving people financial advice but they don’t have the resources to action this advice. We need academic research to measure the effectiveness of these initiatives and provide information about how we can address the root causes and factors that contribute to over indebtedness.’
Words: Thandiwe Jumo
Photograph: Supplied