The Federal Competition and Consumer Protection Commission (FCCPC) has stated that it will start regulating the operations of digital lenders in Nigeria.
This was stated by Babatunde Irukera, executive vice-chairman of the commission at the 2022 World Consumer Rights Day, celebrated on Tuesday in Abuja.
The FCCPC over the weekend in collaboration with enforcement agencies, raided the offices of “illegal” digital loan companies operating in Ikeja, Lagos over alleged consumer rights abuse.
Speaking at the event, Irukera explained that due to the FCCPC’s findings during its recent raids, the activities of loan apps would now fall under regulatory control.
“We discovered that this is much more serious than we thought, and we have to now look at how we can bring these people into the regulatory framework,” he said.
“This is so that we can now hold them to book.”
Although he emphasised that the agency will adopt a more corrective than retributive approach, Irukera said FCCPC and its collaborating agencies were pursuing urgent enforcement action against already known violators while investigating others, as well as criminal prosecutions where applicable.
He said the illegal and unconventional methods of naming and shaming employed by online loan sharks to recover loans have often come with huge collateral damage to the integrity and character of persons who patronise them.
According to him, the interest factor used by the loan companies and the way it is also calculated is a gross violation of ethical principles of lending.
“Whoever has that experience, it is pathetic. It started during the pandemic when most people were at home, and these online lenders come with loans without collateral as if there are no strings attached, and once you log onto their app, they have access to your contacts,” Irukera explained.
“By the way, the interest on that loan is something that is out of the books, once you default, they will start sending messages to your contacts, before you know it, you are in very big trouble.
“That is why something has to be done, and that is what we are doing; trying to get that space regulated.”
He said that it is necessary that digital lending businesses have clear dispute resolution channels and promptly resolve consumers’ complaints and document processes.