The Federal Competition and Consumer Protection Commission (FCCPC) has banned all financial technology companies (FinTechs) from providing payment or transaction services to online money lenders as part of its investigation.
Identified FinTechs such as Flutterwave, Opay, Paystack and Monify are allegedly operating payment systems and providing services to these online lenders under investigation or failing to operate with applicable regulatory approvals.
This comes several months after the commission ordered Google and Apple to force the removal of these money-lending apps from their stores where evidence of inappropriate behavior or use of the app in violation of consumer rights has been established.
This was made known by the Executive Chairman of the FCCPC, Mr. Babatunde Irukera, during a conversation with journalists during a law enforcement exercise on some of the digital money lenders on Thursday in Lagos.
Irukera said the commission also ordered telecommunications and technology companies, including mobile network operators (MNOs), to stop providing servers, hosting or other key services such as connectivity to such disclosed or known lenders.
The news continues after this announcement
What the FCCPC Executive Vice President Says
Irukera said, “Information available to the commission demonstrates that Soko Lending appears to be the largest digital money lender with multiple apps and brand names.
“He covers a significant portion of the digital or online lending market and one of the most prolific players in violating consumer privacy, fair lending terms, and ethical loan repayment/collection practices.
The news continues after this announcement
“Prior to this operation, the commission had previously, on March 11, 2022, taken similar enforcement action against several lenders; whose action and continued investigation have reduced the unethical, heinous and unscrupulous operating practices previously high and growing in the industry.”
The FCCPC boss noted that some of those online lenders who have been investigated have developed methods to leverage technology and other financial service alternatives to circumvent money freeze orders. account and application suspension.
He said, “With today’s operations, the commission expects a significant further reduction in these unacceptable practices.
“The commission also issued new orders today that will disable or diminish the ability of violators to devise circumvention efforts or alternative mechanisms to circumvent the purpose of investigating and protecting citizens.”
Going further, he said the order requires authorization to proceed with digital lending and provides a limited moratorium period for existing businesses to comply in order to continue digital lending.
Irukera added, “The guidelines also oblige different service providers in the relevant ecosystem, such as banks, access/download platforms or stores, technology providers and payment systems, to require regulatory approval before providing services. .
“The commission expresses its gratitude to the victims and citizens who provided information or contributed to the investigation; and welcomes the continued commitment that provides relevant information or intelligence through the channels already established and made public.”
In case you missed it
- Recall that on March 11, the federal government, in a raid through its Joint Committee to Investigate Rights Violations and Unfair Practices, shut down some illegal online money lending banks to prevent not have registered with the Commercial Affairs Commission (CAC) and engaged in activities against the rights of Nigerians. consumers.
- These online banks have charged interest rates that violate the ethics of how loans are made and have been involved in whistleblowing and shaming, which is a violation of people’s privacy regarding how these lenders collect loans, among other violations.
- Lending companies offer short-term loans to help subscribers meet urgent needs, but resort to unprofessional measures of harassment, cyberbullying and data privacy breaches of their customers who may have defaulted on loan repayment. ready.
- Some of the relevant online money lending banks include; GoCash, Okash, EasyCredit, Kashkash, Speedy Choice and Easy Moni.
- Earlier in April, the FCCPC blamed Google for its inability to track down the owners of some failing online money lending banks for violating consumer rights and said it may be working with security forces. the order in the United States, to provide them with the necessary information to get those behind the digital lenders.