THE Federal Competition and Consumer Protection Commission (FCCPC) has raised the alarm over loan apps use of unethical methods to recover loans.
The FCCPC said it observed an increase in the violations of its regulations by the loan apps, referred to as Digital Money Lenders (DMLs).
This was disclosed in a statement on Monday by the acting Chief Executive Officer (CEO) of the Commission, Adamu Abdullahi.
According to him, the commission is stepping up enforcement actions and taking a zero-tolerance approach to DMLs’ abuse of consumers and other abusive behaviour.
He added that the FCCPC noticed increased infractions of the Interagency Joint Task Force’s Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending.
“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 violate the law or utilise unethical recovery methods. As such, the commission is intensifying enforcement efforts and adopting a zero-tolerance stance towards exploiting consumers or abusive conduct, whether in balance calculations, loan default enforcement, or recovery processes.
In addition, the commission said it would engage approved loan apps in the coming days for more robust compliance with regulatory frameworks.
“Concerning operators that do not possess the commission’s approval, the scrutiny process will include law enforcement action against such, in addition to regulatory prohibition and consequences,” the commission noted.
The Federal Government, in conjunction with Google in April 2023, 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 FCCPC, Ondaje Ijagwu, said the Federal Government was putting measures in place to enforce Google’s latest policy.
He said the action was consistent with the Nigerian authorities’ move to curtail the invasion of customers’ privacy by loan app firms.
The ICIR reported in July 2023 that the FCCPC delisted two loan apps for violating customers’ privacy.
Meanwhile, Nigerians continue to patronise loan apps despite their unconventional ways of recovering loans.
These loan apps act as platforms where one can get quick loans with no collateral other than providing a bank verification number (BVN) and a request to allow pictures and contacts on a potential customer’s phone.