Concerns have been raised by the Federal Competition and Consumer Protection Commission (FCCPC) regarding the persistent disregard of online lenders, also referred to as loan apps, for its Limited Interim Regulatory/Registration Framework and Guidelines.
According to a statement released by the FCCPC and signed by Dr. Adamu Abdullahi, Acting Executive Vice Chairman, and Chief Executive Officer, the number of infractions has increased as more Nigerians are now obtaining loans through different lending apps.
Abdullahi pointed out that the increasing number of clients who are in default may have been the catalyst for the use of harassment and slander.
He issued a warning, saying that lenders would not be allowed to violate the Commission’s regulations by recovering debts using unethical ways.
He said that to make sure that the digital lenders are abiding by its regulations, the Commission would immediately step up its enforcement actions.
Abdullahi stated: “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. Despite checks revealing that as of December 2023, FCCPC had registered and approved 211 digital lenders.”
“Nevertheless, breaking the law or using unethical rehabilitation techniques cannot be the answer. Because of this, the Commission is stepping up its enforcement actions and declaring that it will not tolerate any abusive behavior or consumer exploitation in the context of balance calculations, loan default enforcement, or recovery procedures.”
“Additionally, the Commission will be contacting approved loan applications in the next days to discuss a more comprehensive compliance framework, which would include any applicable additional standards as well as potential measures for apps that would otherwise be blacklisted.”
To promote and enhance consumer and competitor fairness, he stated that the Commission would welcome demonstrated and timely compliance by all genuine operators.
He stated that in addition to regulatory prohibitions and penalties, law enforcement action would be taken against operators who do not have the Commission’s approval as part of the scrutinizing process.
