September 24, 2023

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Online Lenders get New Rules, Stopped from Sending Messages to Client’s Contacts


CEM REPORT | The Federal Competition and Consumer Protection Commission (FCCPC) has listed conditions under which digital money lenders would operate in the country, a move to check excesses of the lenders in the country,

According to Guardian, the Executive Vice Chairman of FCCPC, Babatunde Irukera, in a document signed on behalf of the Joint Regulatory Task Force (JRTF) addressing ‘loan sharks’, said that the Commission would also hold employees, collaborators or agents of money lenders accountable in line with extant laws in the event of any violation.

The FCCPC, in collaboration with enforcement agencies, had raided the offices of “illegal” digital loan companies operating in Ikeja, Lagos, over alleged rights abuse.

He stated that as a condition for acceptance into the cooperation framework, some of the moneylenders have been required to desist from contacting, including by text messages, people on contact lists/third parties of borrowers or defaulters.

According to the FCCPC, some of the lenders that are under investigation with frozen accounts, have approached the Commission and expressed the desire to cooperate with the FCCPC. This, it said, necessitated the unveiling of conditions for which they should be allowed to operate.

[READ ALSO] CBN to Nigerians: Avoid Dealing with Illegal and Unlicensed Financial Operators

“Some of the moneylenders under investigation, or whose bank accounts have been frozen, and others, have approached the Commission and expressed a desire to cooperate and assist the Commission regarding the investigation under the Commission’s Investigative Cooperation/Assistance Rules and Procedure 2021,” the statement reads in part.

“They seek benefit under Rule 4 in exchange for cooperation, assistance and compliance under Rule 3. “Declarations enforceable under S. 153 of the FCCPA to immediately and forthwith: Cease from contacting, including by text messages, people in contact lists/third parties of borrowers or defaulters.

“Discontinue further abusive, coercive and inappropriate language in communication with loan defaulters or borrowers. Provide a mechanism for transparency regarding loan repayment fees, default or late payment charges as well as interest calculation to the Commission.”

“The mechanism must include an open, accessible and responsive feedback and dispute resolution framework that complies with fair lending and loan recovery principles as well as acceptable regulatory standards for reconciliation of disputed balance calculations and complaint resolution”, the FCCPC added.

Irukera said the commission would be consistent in ensuring that violation of the law is not condoned.

The Commission also commended consumers for diligent cooperation in providing vital and meaningful information that had so far assisted the Commission’s investigations.

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