THE Federal Competition & Consumer Protection Commission of Nigeria (FCCPC) has delisted two digital money lenders (DMLs) for violating customer privacy.
The Commission said the violating DMLs have resorted to using Android Package Kits (APK) file formats, providing links to consumers to visit unregistered websites using their Android devices/phones.
“In the course of that interaction, consumers’ private information that is otherwise protected and prohibited from access or download by DMLs or their apps is accessed and downloaded,” the FCCPC said.
The regulatory agency added that it has placed digital money lenders that have refused or failed to register under the guidelines on its watchlist for strict surveillance and necessary action.
The FCCPC said it will soon release a list of illegal (unregistered) digital loan apps operating in Nigeria.
The Commission said in a bid to protect consumers and maintain a regulated financial ecosystem in conjunction with the Joint Regulatory and Enforcement Task Force (JRETF), it took decisive actions against two of the companies for their alleged involvement in fraudulent practices.
According to a statement by the Commission’s boss, Babatunde Irukera, on Thursday, July 20, the two companies are Sycamore Integrated Solutions Limited and Orange Loan and Purple Credit Limited.
According to the FCCPC, during the Commission’s ongoing investigation and tracking of these illegal DMLs, it was discovered that some registered DMLs had engaged in duplicity.
While appearing on the approved list and Playstore, these registered lenders also used APKs to attract borrowers to illegal and unregulated lending practices, FCCP claimed.
“The companies or apps so far identified, and for which there is supporting evidence of this malfeasance, are Sycamore Integrated Solutions Limited and Orange Loan and Purple Credit Limited.
“They are the owners of “Getloan” and “Camelloan” respectively, and occupy Nos. 1 and 65 on the Approved List of the Commission, which is available on the Commission’s website.
“Accordingly, the Commission has now permanently delisted Sycamore Integrated Solutions Limited and Orange Loan and Purple Credit Limited, along with their respective apps – “Getloan” and “Camelloan”.
“In addition, the Commission has entered an Order to Google Playstore and other payment and financial service providers, permanently prohibiting the provision of any services associated with digital lending to Sycamore Integrated Solutions Limited and Orange Loan and Purple Credit Limited,” the Commission stated.
The FCCPC clarified that the revocation and penalties taken against these offenders were final and would set a standard for handling any other violators found in the future.
In light of these recent developments, the Commission reiterated its advice to consumers to exercise caution when selecting digital money lenders.
It recommended that consumers patronise only DMLs on the Commission’s approved list, as these lenders have undergone regulatory scrutiny, ensuring the safety and privacy of consumers’ information.
The Commission and the JRETF pledged to continue tracking illegal operators employing APKs and other means to interact with consumers.
The FCCPC ask the public to provide reasonable evidence and report any violations through the designated email address, [email protected].
The Commission specifically recommended that consumers only patronise digital lenders on its approved list to avoid falling victim to illegal and prohibited lending and recovery practices.
A total of 180 loan applications have been registered (completely or partially) and given the go-ahead by the FCCPC to operate in Nigeria.
In April, the Federal Government, in conjunction with Google, prohibited loan apps from accessing contacts and images of their customers.
In a chat with The ICIR on Monday, April 10, the spokesperson of the Federal Competition and Consumer Protection Commission (FCCPC), Ondaje Ijagwu, said the Federal Government is putting measures in place to enforce the latest policy by Google.
He said the action was consistent with the Nigerian authorities’ move to curtail the invasion of customers’ privacy by loan app firms.
Debt recovery agents of loan apps in Nigeria have continued to shame defaulting borrowers against the nation’s cyber laws while the loan app companies charge borrowers high-interest rates.
In August 2021, The ICIR explained how Nigerian fintech companies shame, threaten customers for late payment of loans.
Also, in March 2022, The ICIR highlighted how loan apps debt recovery agents operate.
The digital loan apps mislead borrowers by posting lower interest rates on the Google Play Store, but borrowers saw their loan tenor increase as the loan apps raised interest rates by more than 50 per cent.
The interest rates can be as high as 75 per cent to 395 per cent per year.
Despite the efforts of the regulating authorities, the Illegal loan apps have ignored Nigeria’s cyber laws and continue to shame their customers.