FCCPC Cracks Down on Loan Apps Violating Regulations Amid Rising Defaults
The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over the increasing violations of its Limited Interim Regulatory/Registration Framework and Guidelines by online lenders, also known as loan apps.
In a statement signed by its Acting Executive Vice Chairman/Chief Executive Officer, Dr. Adamu Abdullahi, the FCCPC highlighted the surge in infractions as more Nigerians turn to these apps for loans.
Abdullahi emphasized that resorting to harassment and defamation tactics in debt recovery may stem from the growing number of defaulting customers. He cautioned that such unethical practices are not acceptable under the Commission’s regulations.
To address these issues, the Commission announced plans to ramp up enforcement efforts to ensure compliance among digital lenders.
Despite having registered and approved 211 digital lenders as of December 2023, Abdullahi underscored the need for lawful practices, especially during periods of increased loan demand and default risks.
He stated, “The solution cannot be to violate the law or utilize unethical recovery methods,” emphasizing a zero-tolerance stance on exploitation of consumers or abusive conduct in loan default enforcement or recovery processes.
Moving forward, the FCCPC plans to engage approved loan apps to establish a more robust compliance framework and address any additional requirements or mechanisms for previously blacklisted apps.
Abdullahi urged all legitimate operators to demonstrate timely compliance to promote fairness to consumers and among competitors. For unapproved operators, he warned of law enforcement action and regulatory consequences.
The FCCPC’s crackdown aims to uphold consumer rights and ensure ethical practices within the digital lending sector, safeguarding borrowers from abusive debt recovery tactics.
