The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concerns over the continuous violations of its regulatory guidelines by Digital lenders, popularly known as loan apps.
The Commission via a statement signed by its Acting Executive Vice Chairman/ Chief Executive Officer, Dr. Adamu Abdullahi, stated that the unethical practices by these apps have heightened as more Nigerians continue to take loans, with significant cases of default in payments.
In a bid to address the unscrupulous practices of these loan apps, the FCCPC has announced plans to intensify its enforcement efforts to ensure that digital lenders are complying with its regulation.
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Speaking on this, the Executive Vice Chairman of the commission, Dr Abdullahi in a statement released on Monday, said;
“The Commission understands the increased demand for loans during this time of year, leading to an increased risk of default due to large numbers and typical cash flow challenges and constraints. However, the solution cannot be to violate the law or utilize unethical recovery methods.
“As such, the Commission is intensifying enforcement efforts and adopting a zero-tolerance stance towards any exploitation of consumers or abusive conduct, whether in balance calculations, loan default enforcement, or recovery processes. In addition, in the coming days, the Commission will be engaging approved loan apps concerning a more robust compliance framework including any additional requirements where applicable, and possible mechanisms for otherwise blacklisted apps.”
The FCCPC boss further said the Commission would welcome demonstrated and timely compliance by all legitimate operators to promote and enhance fairness to consumers and fairness among competitors. On operators that do not possess the Commission’s approval, he said the scrutiny process would include law enforcement action against such, in addition to regulatory prohibition and consequences.
The FCCPC’s recent concerns over the continuous violations of its regulatory guidelines by loan apps, is coming after it was reported in December last year that the commission had reduced the harassment and defamatory messages sent by digital money lenders to their customers by 80%.
This was disclosed by the former chairman of the commission Babatunde Irukera who stated that the desire and aspiration of the Commission was to eliminate the defamatory messages, and intrusion on people’s privacy and achieve more ethical lending.
Meanwhile, with the latest complaints by the commission, it is obvious several digital lenders have resorted to unethical practices to retrieve loans.
The FCCPC frowns at such practices and has for a long time continued to ensure that loan apps in Nigeria operate within the guidelines and regulations. It is understood that there has been a contentious battle with loan apps, as the FCCPC understands that digital lenders go as far as tarnishing the image of customers over repayment defaults.
Due to their persistent breaches of privacy and unethical recovery practices, the FCCPC has taken several decisive actions.
It has collaborated with key entities such as the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Central Bank of Nigeria (CBN), Economic and Financial Crimes Commission (EFCC), and the Nigerian Communications Commission (NCC), to curb the unethical practices of loan apps.
Also, the commission has collaborated with Google, to delete unregistered loan apps and apps that violate regulatory practices, marking a crucial move in sanitizing Nigeria’s digital lending space.