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CPP fighting to curb illegal loan apps

CPP fighting to curb illegal loan apps
Photo by Balázs Kétyi- Ask Nigeria

50 accounts frozen due to problematic repayment policies of loan sharks.

The idea of digital loaning applications has been so proliferated across the country and as a result, the demands for loan facilities have significantly skyrocketed. However, many complaints pointing to cases of data privacy breaches and dehumanization have emerged. Numerous cases have pointed to this e-commerce platforms indulging in illegal actions, shaming their customers’ reputation and violating their privacy. Admittedly, many verified reports have also indicated that customers are unwilling to pay their loan, rendering these firms in debt. We cannot shy away from the fact that these profiteers have had a lot of shortcomings.

In forcing customers to repay their loans, these loan sharks have employed tactics like sending cautious text messages to their mobile contacts and portraying them as individuals with questionable characters. Also, they also phone contacts of these defaulters who do not have the slightest idea about the loan, in a bid to shame their characters or ask about the whereabouts of these defaulters. All these antics have led to complaints from the general public, concerning the illegal conduct practices by these E-Commerce firms.

FCCPC, ICPC and Central Bank are working together to curb this menace.

As a result of this prevailing abuse, the Federal Competition and Consumer Protection Commission (FCCPC) have led a joint attempt to address this issue. The Executive Officer of FCCPC, Babatunde Irukera stated that the commission was collaborating with the Independent Corrupt Practices Commission (ICPC), the Central Bank of Nigeria and the National Information Technology Development Agency. He noted that the continued complaints about these problematic repayment enforcement policies such as privacy and arbitrary violations, customer feedback mechanisms and exploitative interests have caused the commission to work towards curbing this issue.

As at May, Irukera iterated FCCPC’s intention to take strong actions against these loan sharks and other firms indulging in the violation of rights of Nigerian customers by freezing 50 accounts that belonged to some of these loan sharks’ operators. He also disclosed that over 12 applications have been taken off Google Play Store, whilst being in discussion with another 10 companies presently. As a result of this enacted regulation, Irukera averred that the rate of defamatory messages has reduced by at least 60 percent, with numerous companies also promising to halt sending these defamatory messages and incurring better regulatory paradigms.

2016 recession responsible for propagating these loan sharks in Nigeria.

Also, the inter-agency Joint Regulatory and Enforcement Task Force was employing a Limited Interim Framework and Guidelines for Digital Lending, to establish a coherent plan for clear regulatory framework. On the propagation of these loan sharks, experts found out that economic downturn, desperation, ease of borrowing and greed on the part of many customers were proponent reasons for the proliferation of these loan sharks. Michael Familokun, a financial expert noted that these loan apps were not popular in the country until the recession that ravaged the country’s economy in 2016 and gradually, these loan sharks commenced exploiting the hardship of numerous citizens.

Mike Anyanacho, an ICT expert in Lagos also stated that the ease associated with securing loans from the comfort of the home had contributed to numerous people falling victim of these loan shark illegalities. He also said that while the conditions of bank loans were so cumbersome, the ease of these online apps has immensely drawn people to using it. He stated that these loan apps continually feed off people’s greed. He however commended the FCCPC on clamping down many of these fraudulent applications.

Stakeholder urged to further enforce regulations of these loan sharks.

These applications have been reported to continually breech the policies of play store on personal loan apps. In spite of the efforts of FCCPC in regulating these platforms, numerous illegal apps still persist in their operations and dehumanization of their loan recovery processes. These loan apps, for instance advertise 60–90-day plans for repayment on Play Store but indulge in less lenient repayment plans. However, there are immense calls for the need for collaborations between responsible commissions and other important stakeholders in enforcing the regulation of these numerous loan sharks.


Related Link

Central Bank of Nigeria: Website

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jdpumping
jdpumping
4 months ago

All these illegal loan apps are so much operating with impunity that one feels so irritated,the rate at which they send messages to their lenders for defaulting such as defamatory messages,çalling and messages to their friends,loved ones even threatening.

Adeolastan
Adeolastan
4 months ago

The way by which all the loan shark operate in the country is unprofessional and very irritating,they dehumanising their customers by sending unwanted messages to their contact and portray them as bad person. Serious action should be taking to curb this action.

Ultra0711
Ultra0711
4 months ago

These online loan sharks apps deserve to be scrap. People have committed suicide and witnessed a tremendous embarassement in the process the apps took in recovering their loans. it needs to stop.

Last edited 4 months ago by Ultra0711
SarahDiv
SarahDiv
4 months ago

The Federal Competition and Consumer Protection Commission (FCCPC), ICPC and Central Bank are actually doing well in curb illegal activities of these online loan apps. They have send some people to early grave because of their dehumanizing activities.

Tonerol10
Tonerol10
4 months ago

So many online loan apps. The way the operate is not good. The way they dehumanising their customers by sending threatening messages to their friends and loved ones is too bad

DimOla
DimOla
4 months ago

CCP are really doing a great job in curbing all the activities of these loan sharks who have killed so many people through the short term loan with exhibition interest rate .

Haykaylyon26
Haykaylyon26
4 months ago

It is a nice thing the CPP are fighting the illegal loan apps there are many loan apps in out country and the loan shark just they do anyhow uselessing people because they received loan from they. They make some people life hard.

Abusi
Abusi
4 months ago

I’m happy the government is now seeing reasons why they have to sanction these illegal loan apps. They should seriously be dealt with.

Nwachukwu Kingsley
Nwachukwu Kingsley
4 months ago

We should know that the concept of using digital applications to make loans has become so widespread across the nation, and as a direct consequence of this, the demand for various types of lending facilities has dramatically increased.

Adesanyaj72
Adesanyaj72
4 months ago

It has been demonstrated in a number of situations that e-commerce platforms engage in criminal activities, tarnishing the reputation of their clients, and infringing their right to privacy.

Chibuzor
Chibuzor
4 months ago

There have been several stories that have been substantiated which indicate that clients are unwilling to pay back their loans, which results in these businesses being in debt. There is no getting around the undeniable fact that those who have profited from this situation have a great deal of room for improvement.

Hassan Isa
Hassan Isa
4 months ago

These loan sharks have used strategies such as sending suspicious text messages to their customers’ mobile connections and portraying them as individuals with dubious morals in order to coerce their customers into repaying the loans they have taken out from them.

Godsewill Ifeanyi
Godsewill Ifeanyi
4 months ago

The repeated complaints about these problematic payback enforcement practices, such as invasions of privacy and arbitrariness, customer feedback systems, and exploitative interests, have forced the commission to work toward limiting this issue in an effort to reduce the severity of the problem.

Taiwoo
Taiwoo
4 months ago

There has been at least a sixty percent drop in the number of messages that are considered to be defamatory, and a great number of businesses have pledged to stop sending these types of defamatory messages and to implement improved regulatory norms.

Kazeem1
Kazeem1
4 months ago

These lending apps didn’t take off in the country until after the 2016 recession, when loan sharks began taking advantage of the financial misery of a growing number of ordinary people.

theApr
theApr
4 months ago

How do you solely rely on sending cautious/threat messages to defaulters and their phone contacts as a means of recovery of payment. It’s too much of risk. You don’t know the debtors personally, let alone their address.

Christiana
Christiana
4 months ago

The concept of using digital applications to obtain loans has become so widespread across the nation, and as a direct consequence of this, the number of people looking for loan facilities has dramatically increased.

Tolaniiii
Tolaniiii
4 months ago

Data privacy breaches and dehumanization are common issues. Numerous incidents show e-commerce platforms engaging in illegal activities, humiliating clients’ reputations, and abusing their privacy.

Bola12
Bola12
4 months ago

many independent sources have reported that customers are unwilling to pay back loans, putting many businesses in the red.

Iyanu12345ogg
Iyanu12345ogg
4 months ago

FCCPC, ICPC and Central Bank should work together to curb this menace. its becoming too rampant…going too far by contacting who do not have the slightest idea about the loan, in a bid to shame to shame their customers and to know their whereabout. I guess that wasn’t in the agreement they made….. Who granted access to do such?

Last edited 4 months ago by Iyanu12345ogg
Remi1
Remi1
4 months ago

For effective risk management, loan sharks should know their clients physically, their address, their business and feasibility of potential performing loan. But digital loaning kind of put a limitations to all of these.

Last edited 4 months ago by Remi1
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