FG to sanction online banks over infringement on consumer rights
By Oluwaseyi Lawal
The Federal Competition and Consumer Protection Commission has announced its intention to penalize online banks found guilty of infringing on customer rights. This decision stems from the escalating instances of violations observed within its Limited Interim Regulatory/Registration Framework and Guidelines, particularly among digital lenders, commonly referred to as loan apps.
According to a recent statement issued by Adamu Abdullahi, the acting Executive Vice Chairman of FCCPC, there has been a noticeable surge in breaches as more Nigerians opt for digital platforms to secure loans.
The commission acknowledged that the upsurge in violations could be linked to the growing number of customers defaulting on loans, prompting certain digital lenders to engage in harassment and defamation tactics during their debt recovery efforts.
The FCCPC chairman noted, “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.
“However, the solution cannot be to violate the law or utilise unethical recovery methods. As such, the commission is intensifying 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.
“In addition, in the coming days, the commission will be engaging approved loan apps concerning a more robust compliance framework including any additional requirements where applicable, and possible mechanisms for otherwise blacklisted apps.”
The implementation of the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending 2022 became necessary due to numerous complaints regarding persistent harassment by digital lenders.
Under this framework, the FCCPC has been granted authority to oversee the digital lending sector and mandate registration and approval for companies intending to operate in this domain, in response to the illicit practices of certain apps.
Additionally, the head of the FCCPC expressed a desire for all legitimate digital lenders to adhere to compliance measures, aiming to foster fairness for consumers and create a level playing field among competitors. Nevertheless, he emphasized that operators failing to comply would undergo a thorough evaluation process, which may involve legal actions, prohibition, and ensuing consequences.
Comment
No comments found.