FCCPC’s Babatunde Irukera orders loan sharks to desist from compounding interests

Avatar
*Babatunde Irukera has remained laser-focused on breaking the backbone of the loan sharks | *The Joint Task Force said the investigation into the practices of the loan apps is still active and ongoing
Babatunde Irukera

The Vice-Chairman and Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera has remained laser-focused on breaking the backbone of the loan sharks, the loan apps notorious for online and offline harassment of defaulters.

This week, he took even harsher actions against them, ordering that they desist from compounding interest on loans and their loan collection practices as the Joint Task Force — which includes; FCCPC, the Independent Corrupt Practices and Related Offences Commission (ICPC), Economic and Financial Crimes Commission (EFCC), National Information and Technology Development Agency (NITDA), National Human Rights Commission (NHRC) and Central Bank of Nigeria (CBN) — investigate their practices even further.

In a statement signed by Irukera, the commission promised to subject violators to “the full extent of the law.”

“The Commission admonishes all the businesses that were subject of regulatory intervention on Friday, March 11, 2022, to cease and desist the interest compounding and loan repayment/collection practices that are the objects of this investigation,” a statement from the commission reads.

‘’In the event that any of these businesses continue in any of this conduct, or the Commission receives credible evidence of such, violators will be subjected to the full extent of the law including prosecution (without option of administrative regulatory resolution).”

The Joint Task Force has been consistent in reining in on the powers of these loan apps. Last week, they raided their offices in Ikeja, Lagos, and shut down some of their bank accounts. Irukera at the time said that many of these companies are not licenced to be in operation in Nigeria. The raid comes after an investigation by the task force that started in 2020.

The loan sharks have been accused of giving out soft and easy loans to Nigerians without collateral and then sending messages to contacts of loanees who miss paydays using words like “criminal” and “thief.” Some Nigerians affected by this have said that the loan companies at some point called them, threatening them to tell their contact to pay up, even though they aren’t guarantors to the loan collectors.

https://technext.ng/2021/08/23/is-public-shaming-by-online-lending-platforms-legal-or-criminal-a-legal-perspective/

The loan sharks have also been accused of ridiculous interest rates that Irukera now says they must desist from in this new order. In January this year, the Punch reported that loan apps had sent obituaries of living debtors to their phone contacts and family members for borrowing as low as ₦15,000 only.

In 2021, NITDA fined Soko Loans ₦10 million for violating the privacy of its client and sending disparaging messages to its client. Even that didn’t deter these loan sharks who largely got Nigerians to take the loans in the middle of the coronavirus pandemic when it seemed like they had no other options.The Joint Task Force issued an order to Apple Store and Play Store to take down the apps of the companies from their stores.

The Joint Task Force which said that the investigation into the practices of the loan apps is still active and ongoing also added that it welcomes any useful information that may assist its investigation.


If you’d like to get featured on our Entrepreneur Spotlight, click here to share your startup story with us.


Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!


Related Posts

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!