Reports reveal that loan companies in Nigeria still harass and defame defaulting customers, despite several warnings from the Federal Competition And Consumer Protection Commission (FCCPC), against such action.
These companies with their outrageous interest rates, have continued with their unprofessional way of loan recovery, through threats, blackmail, and breach of data privacy.
They still go ahead to send unpleasant messages to their debtors, as well as their contacts, which contradicts a recent Google policy restraining loan apps from illegally accessing customers’ contact.
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Recall that following the complaints of customers speaking against loan companies’ unhealthy practices, the FCCPC last year, worried by the prevailing abusive and arm-twisting practice, led a collaborative effort to address the situation.
Babatunde Irukera, Executive Vice Chairman/Chief Executive Officer of FCCPC, said then that the commission was working closely with the Independent Corrupt Practices Commission (ICPC), the National Information Technology Development Agency, and the Central Bank of Nigeria to address the issue.
In May 2022, the FCCPC confirmed that it had taken strong action against loan apps and other firms violating the rights of Nigerian consumers by freezing 50 accounts belonging to illegal loan app operators.
The commission disclosed that it took down over 12 apps off the Google Play Store, noting that the rate of defamatory messages had dropped by at least 60 percent.
The FCCPC further noted that the new Google’s policy to ban loan apps from accessing user contacts, and photos is one of the success stories of the Commission’s partnership with Google as it continues to sanitize the digital lending space in Nigeria.
In addition to that, Google said the loan apps must also provide all the necessary information about their interest rates, repayment plans, applicable fees, and charges on the Play Store to guide users.
It is understood that the continuous violation of people’s privacy and unethical recovery practices led to the introduction of an interim registration framework for digital lenders by the FCCPC.
The registered companies were said to have provided information regarding their interest rates, the type of information they access from their customers, and sources of their money, among others.
The FCCPC, however, noted that registration does not mean that all the registered companies are law-abiding, but it will significantly reduce how they violate the law.
Furthermore, the Commission commended consumers for diligent cooperation in providing vital and meaningful information that had so far assisted the Commission’s investigations.
Meanwhile, experts have identified economic downturn, desperation, ease of borrowing, and greed on the part of customers as some of the prevailing reasons for the proliferation of loan apps, despite their unhealthy practices.
While commending FCCPC for its clampdown on illegal loan apps which abuse consumer rights, several citizens have gone online to urge the commission to sensitize Nigerians on responsible ways to access loans.
They disclosed that defamation and embarrassment from these loan apps can lead to a high rate of suicide in Nigeria if not properly attended to.
However, those who take loans from illegal loan apps cannot be completely exonerated from culpability. Some experts maintained that some of these loan companies are the real villains for violating extant laws.