Nigerian Consumer Protection Agencies raid digital lending firms violating consumer rights 

The Federal Competition and Consumer Protection Commission (FCCPC), in conjunction with the
Independent Corrupt Practices and Other Related Offences Commission (ICPC), the National Information Technology Development Agency(NITDA) and the Nigeria Police Force (NPF) raided some digital lending firms allegedly violating consumer rights over the weekend in Lagos, Nigeria.

The joint operation led by the FFCPC raided the offices of GoCash, OKash, EasyCredit, Kashkash, Speedy Choice, Easy Moni, and Sokoloan located at Ikeja, Lagos state.

Speaking during the raid, the Chief Executive Officer of FCCPC, Babatunde Irukera said the raids were done in response to numerous complaints by customers about the companies’ violation of their privacy in their debt recovery exercise.

He stated the agency had begun investigations into the allegations since 2020.

According to him, “This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders.

“Because there was lockdown due to the pandemic, people needed small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it.

“Towards the end of last year, we gathered quite a lot of information. We started working with some other key agencies and the FCCPC led the meeting where we all agreed there would be a joint effort to look into these businesses.”

At the meeting held late last year, initial inquiries demonstrated that many of the purported lenders are not legally acceptably established or otherwise licensed by the appropriate authorities to engage in the services they ostensibly provide. The meeting resolved to collaborate, pursue urgent enforcement action against already known violators while investigating others, as well as criminal prosecutions where applicable.

“The key two things that were subject of concern were what seems to be the naming and shaming violation of people’s privacy with respect to how these lenders recover their loans”, he said.

“Secondly, the interest rate seems to be a violation of the ethics on how lending is done. So, those were the two things that we set out to look for.

“So, we started an investigation trying to determine the location of these firms. That has been a very difficult thing. We did that for several months and some of them have moved from one place to the another and we have been visiting these places for months.”

Mr Irukera said it was difficult tracking the loan companies, adding that it took them several months because some of the lenders moved from one place to the other.

He stated that some of the officials visited the companies daily to be sure of their location.

“We found out that most of these companies operate from the same place. We also found out that many of them are actually operated by the same person,” he said.

“They are not Nigerian companies, they don’t have addresses in Nigeria and they are not registered in Nigeria with the Corporate Affairs Commission and they do not have any license to do their businesses.

“Essentially what they have is an App, and so we started gathering more information, we engaged the public and people who have been their victims gave us more information.”

Mr Irukera said that they presented their findings to the court, and got a warrant to “proceed with an investigation into a search and seizure. And sometime last month, a court issued a warrant and between then and now we were preparing a sting operation which is what you are seeing here today because we want to be sure we are hitting at the place where we could get many of them.”

He said the commission had written to global app companies, asking them to shut down the loan companies’ apps.

“In addition to what you are seeing here today, the FCCPC has also issued multiple orders today,” he added.

“Two of them are going to vendors: Apple and Google stores where some of these apps are available. We have asked them to shut these companies’ apps down so that people will not be victimised anymore.

“Secondly, some of them (the orders) have gone to the banks, asking them to freeze the accounts used by these people.”

“I must add though that not all money lenders are operating illegally and that is why it has been taking time for us to track these people. It doesn’t mean that the people we are proceeding against today are the only ones, but these are where we have information now and we want to start with them.”

Mr Irukera said the commission would restrain the business of those that are found wanting and freeze their accounts.

He also advised the public not to do any business with them.