CBN Orders Banks to Stop Using Misleading Advertisements That Induce Customers: Full Compliance Guide 2025

The Central Bank of Nigeria has issued a sweeping directive ordering all deposit money banks, payment service banks, and financial institutions to immediately withdraw misleading advertisements that violate consumer protection standards. This comprehensive regulatory action targets promotional materials that use inducements, exaggerated claims, and deceptive marketing tactics to attract customers.

The directive, signed by Olubunmi Ayodele-Oni on behalf of the Director of the CBN's Compliance Department, follows an extensive thematic industry review that exposed widespread violations of the Consumer Protection Regulations 2019 and the Guidelines on Advertisements by Deposit-Taking Financial Institutions issued in 2000.

Why CBN Banned Misleading Bank Advertisements in Nigeria

The apex bank's comprehensive review revealed alarming patterns in how Nigerian financial institutions market their products and services. Many institutions continue to publish adverts that exaggerate benefits, omit key information, obscure risks, or rely on unaudited financial statements, according to the regulatory findings.

These deceptive practices have far-reaching consequences for Nigeria's financial system. The CBN emphasized that misleading advertisements distort market competition, undermine the integrity of the financial sector, and expose consumers to risks they do not fully understand. Such promotional tactics particularly affect vulnerable customers who may make hasty financial commitments based on incomplete or inaccurate information.

The regulatory intervention addresses the growing concern about how digital transformation and widespread adoption of technology in financial services delivery have created new opportunities for misleading marketing practices. While these technological advances improved consumer convenience and accessibility, they also introduced novel challenges in ensuring transparent and fair marketing.

Prohibited Advertisement Practices Under CBN Consumer Protection Regulations

The Central Bank has established strict boundaries for what constitutes acceptable marketing in the Nigerian banking sector. Financial institutions must understand that certain promotional tactics are now explicitly banned regardless of their popularity or perceived effectiveness.

Comparative and Superlative Statements: Comparative, superlative, or de-marketing claims, whether direct or indirect, are prohibited under the new enforcement guidelines. Banks cannot claim to be the "best," "fastest," "most reliable," or use any language that creates unfair comparisons with competitors. This prohibition extends to implied comparisons that suggest superiority over other financial institutions.

Chance-Based Promotional Inducements: The directive specifically prohibits promotional schemes that constitute inducements, including lotteries, prize draws, lucky dips, and other chance-based incentives. Such incentives often distract from underlying product risks and can manipulate vulnerable customers into making choices they do not fully understand, the CBN warned in its circular.

Exaggerated Benefits and Omitted Information: Advertisements must not exaggerate product benefits, omit material information about fees, charges, or risks, or present unbalanced views that highlight advantages while concealing potential drawbacks. Every claim must be factual, verifiable, and supported by evidence.

Key Prohibited Practices

Banks are strictly forbidden from using lottery systems, prize draws, or lucky dips to attract customers. Making comparative statements that de-market competitors directly or indirectly is prohibited. Publishing superlative claims without verifiable evidence, omitting critical information about fees, charges, and risks, and referencing unaudited financial performance in promotional materials are all banned practices.

Creating misleading impressions about product benefits or institutional stability and using opt-in for promotional materials as a prerequisite for product onboarding are also explicitly prohibited under the new guidelines.

Mandatory Requirements for Bank Advertisements and Marketing Materials

The CBN has established comprehensive standards that all financial institutions must meet before releasing any advertisement or promotional content. These requirements create a framework for transparency, accuracy, and consumer protection in banking sector marketing.

Prior Notification Protocol: Before releasing any advertisement, banks must provide formal notification to the CBN specifying the campaign duration and timelines, creative materials to be published or aired, intended demographic and geographic audience, and written confirmation of internal legal and compliance clearance. Crucially, institutions must provide evidence that the underlying product or service being advertised has already received CBN approval.

The notification process serves strictly monitoring purposes and does not constitute CBN approval or endorsement of the advertisement. Financial institutions remain fully responsible for ensuring complete compliance with all applicable laws and regulations before notification and publication.

Factual, Balanced, and Transparent Content: All advertisements must meet three fundamental criteria established by the regulator. Content must be factual, presenting only verifiable information about products, services, fees, and terms. Marketing materials must be balanced, fairly representing both benefits and risks without creating misleading impressions. Transparency requires clear disclosure of all material information that consumers need to make informed decisions.

CBN Compliance Attestation Requirements for Financial Institutions

The Central Bank has implemented stringent accountability measures that place personal responsibility on senior executives for their institution's advertising compliance. This framework ensures that compliance receives appropriate attention at the highest levels of organizational leadership.

Within 30 days of receiving the directive, all affected institutions must submit a comprehensive compliance attestation. This document must be jointly signed by three key executives: the Managing Director or Chief Executive Officer, the Executive Compliance Officer, and the Chief Compliance Officer. The tripartite signature requirement ensures shared accountability across executive leadership and compliance functions.

The attestation must explicitly confirm that all current advertising and promotional practices comply with applicable laws, adhere to CBN regulations and circulars, follow internal governance processes and approval procedures, and meet the standards established in the Consumer Protection Regulations 2019 and Advertisement Guidelines 2000.

Penalties and Sanctions for Non-Compliant Bank Advertisements

The CBN has established a clear timeline and framework for enforcement that leaves no ambiguity about consequences for continued violations. Financial institutions that fail to comply face serious regulatory sanctions that could significantly impact their operations and reputation.

Immediate actions required include the withdrawal of all non-compliant advertisements currently in circulation across all media channels, including television, radio, print, digital platforms, social media, and outdoor advertising. Institutions must cease all promotional campaigns that violate the established standards, regardless of contractual commitments with media partners or marketing agencies.

From January 2026, the Central Bank will conduct comprehensive follow-up reviews to assess industry-wide compliance. These reviews will examine both newly published advertisements and verify that previously non-compliant materials have been permanently withdrawn. Institutions found in violation will face sanctions under the Banks and Other Financial Institutions Act (BOFIA) 2020 and the Consumer Protection Regulations.

Potential sanctions include substantial monetary penalties commensurate with the severity and duration of violations, public censure that damages institutional reputation and customer confidence, suspension of approval for new product launches until compliance is demonstrated, enhanced regulatory scrutiny requiring more frequent reporting and oversight, and in extreme cases, restrictions on specific business activities or operations.

The Central Bank of Nigeria's directive to stop misleading advertisements marks a pivotal moment in the evolution of Nigerian banking sector practices. By prohibiting inducements, superlative claims, and deceptive marketing tactics, the CBN has prioritized long-term consumer protection and market integrity over short-term competitive advantages gained through aggressive promotional campaigns.

Financial institutions that embrace these changes as opportunities rather than obstacles will position themselves for sustainable success. Transparent, factual marketing builds customer trust that outlasts any temporary boost from promotional gimmicks. Compliance with these standards demonstrates institutional commitment to ethical practices that enhance reputation and reduce regulatory risk.

As the January 2026 enforcement deadline approaches, banks must act decisively to ensure full compliance. The 30-day attestation requirement and ongoing review process leave no room for complacency. Institutions that treat this directive seriously, implementing comprehensive compliance frameworks and fostering cultures of transparency, will emerge stronger in a financial services landscape built on trust, accuracy, and genuine customer value.