Nigeria Consumer Commission urges Telcos, Fintechs not to deal with unlicensed lending firms

The Federal Competition and Consumer Protection Commission (FCCPC) in Nigeria has once again urged fintechs, Telcos to stop dealing or assisting unlicensed lending companies. The Commission specifically mentioned the following lending firms: Maxi Credit, Here4U, ChaCha, and SoftPay.

This was reiterated in a statement released by the Executive Vice Chairman of the FCCPC, Mr. Babatunde Irukera after an enforcement operation carried out on Thursday, August 18, 2022.

According to him, “The information available to the Commission demonstrates that Soko Lending appears to be the most consequential digital money lender with multiple apps and brand names covering a significant share of the digital/online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms, and ethical loan repayment t/recovery practices.”

“Prior to today’s operation, the Commission had previously, on March 11. 2022 carried out a similar enforcement action with respect to multiple lenders, which action and continuing investigation have reduced previously high and escalating unethical, obnoxious, and unscrupulously exploitative practices in the industry. However. some of the lenders who have been subject of investigation have devised methods to leverage technology and other financial services alternatives to circumvent account freezing and app suspension Orders. With the operations today, the Commission expects an appreciable additional reduction in these unacceptable practices,” he added

The Vice Chairman ordered all operating payment systems including “Fluttervave, Opay, Paystack and Monify to immediately cease and desist providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals.”

He also ordered “telecommunication/ technology companies (including Mobile Network Operators (MNOs)) to cease and desist providing server/hosting, or other key services such as connectivity to disclosed or known lenders who are targets/subjects of investigation or otherwise operating without regulatory approval.”

The commission mentioned that it “has also today entered further orders that will disable or diminish violators’ ability to devise circumvention efforts or alternative mechanisms to circumvent the objective of the investigation and protection of citizens. Particularly, the Commission has entered further Orders to Google Playstore to draw down the following apps which were discovered to be created and operating as a circumvention of existing investigative interventions; Maxi Credit, Here4U, ChaCha, and SoftPay.”

A lot of Nigerians who cannot get loans from traditional financial institutions fall prey to these unlicensed lending firms due to the easy process of getting these loans. However these firms resort to unscrupulous, unsavoury tactics when borrowers fail to repay. Such tactics include sending nasty messages to the borrower’s friends and family stating that the borrower is reneging on his/her payments.