Sokoloan, other loan app operators face probe over rights violation

The Federal Competition and Consumer Protection Commission (FCCPC), the Central Bank of Nigeria (CBN) and the Economic Financial Crimes Commission (EFCC) have commenced a rights violation investigation into the money lending activities of loan apps operating in Nigeria’s Fintech space.

A good number of them, National Daily gathered, have struck gold offering uncollateralized loan facilities to Nigerians albeit at eye-popping interest rates. Of this cohort, it would appear as if some have met and agreed to come down hard on defaulters, resorting to unbelievably desperate measures to recover loan facilities obtained from their apps.

Findings revealed that a number of these loan app operators now send embarrassing short messages service (SMS) and WhatsApp messages to the close contacts of their loan defaulters with the intention of shaming the defaulters, tagging them with terms like ‘criminal,’ ‘fraudster,’ and ‘terrible debtor’ among others.

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In some cases, the full names, phone numbers and pictures of the alleged loan defaulters are shared with their contacts like religious leaders, members of churches and mosques, close friends, bosses, colleagues and family members.

However, in a document signed by Mr. Babatunde Irukera, the Chief Executive Officer of FCCPC for the Joint Regulatory and Enforcement Committee, the committee would lead efforts to address multiple potentially dubious conducts of certain money lenders.

According to him, the meeting resolved to collaborate, pursue urgent enforcement action against already known violators while investigating others, as well as criminal prosecutions where applicable.

He regretted that the act was fast becoming a dominant and abusive practice targeting some of the most vulnerable in society.

“Continuing complaints about questionable repayment enforcement practices including public shaming and violations of privacy have led to significant and understandable consumer aggravation and dissatisfaction.

“Others are arbitrary, unjust, unreasonable, or exploitative interest rates and or loan balance calculations, harassment and failure of consumer feedback mechanisms, among others have caused consumer aggravation.

“Initial inquiries demonstrate that many of the purported lenders are not legally acceptably established or otherwise licensed by the appropriate authorities to engage in the services they ostensibly provide.

“A joint task force of analysts and enforcers was also created and immediately activated.