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
