The Federal Competition and Consumer Protection Commission (FCCPC) has voiced concerns regarding a surge in violations of its Limited Interim Regulatory/Registration Framework and Guidelines by digital lenders, commonly referred to as loan apps.
In a statement signed by its Acting Executive Vice Chairman/Chief Executive Officer, Dr. Adamu Abdullahi, the Commission underscored the increasing infractions as more Nigerians resort to various loan apps. It acknowledged that the rising number of defaulting customers might be leading to instances of harassment and defamation.
Despite recognizing the challenges posed by defaulting customers, the FCCPC emphasized that violating its regulations and resorting to unethical methods for debt recovery is not an acceptable course of action for lenders.
Dr. Abdullahi, in the statement released on Monday, stated:
“The Commission understands the heightened demand for loans during this period, which leads to an increased risk of default due to the large numbers and typical cash flow challenges and constraints. However, the solution cannot involve violating the law or employing unethical recovery methods. Therefore, the Commission is intensifying its 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. Additionally, in the coming days, the Commission will engage with approved loan apps to discuss a more robust compliance framework, including any additional requirements where applicable, and potential mechanisms for addressing concerns with otherwise blacklisted apps.”
The CEO of FCCPC emphasized that the Commission expects prompt and unequivocal adherence from all legitimate operators to promote fairness for consumers and foster healthy competition among peers. Regarding operators lacking the Commission’s approval, he noted that the scrutiny process would involve legal action, regulatory prohibition, and associated consequences for such entities.