The Federal Competition and Consumers Protection Commission, FCCPC, has directed payment systems operators, PSOs, such as Flutterwave, Opay, Paystack and Monify, as well as telecommunication companies, including Mobile Network Operators, MNOs, in Nigeria to stop providing support that enables the operations of illegal digital money lenders, also known as money sharks, in Nigeria.
Executive Vice Chairman/Chief Executive Officer, FCCPC,
Babatunde Irukera, who disclosed this yesterday, in Lagos, when the Commission
conducted enforcement actions against a loan shark known as Soko Lending
Limited, added that FCCPC has secured orders to disable or diminish violators’
ability to circumvent regulatory efforts to protect citizens.
He also announced that a Limited Interim
Regulatory/Registration Framework and Guidelines for Digital Lending has been
developed and adopted by the inter-agency Joint Regulatory and Enforcement Task
Force as interim step to establishing a clear regulatory framework for the
sector.
His words: “Soko Lending appears to be the most
consequential digital money lender with multiple apps and brand names covering
a significant share of the digital/online lending market, and one of the most
prolific actors in violating consumer privacy, fair lending terms and ethical
loan repayment/recovery practices.”
He recalled that the Commission had previously carried out a
similar enforcement action which reduced exploitative practices in the
industry, noting, however, that some of the lenders have devised methods to
circumvent account freezing and app suspension orders.
Irukera further stated: “The Commission has also entered
further Orders that will disable or diminish violators’ ability to devise
circumvention efforts or alternative mechanisms to circumvent the objective of
the investigation and protection of citizens.
“Particularly, the Commission has ordered all operating
payment systems including Flutterwave, Opay, Paystack and Monify to immediately
cease and desist providing payment or transaction services to lenders under
investigation or not otherwise operating with applicable regulatory approvals.
“FCCPC has also ordered telecommunication/ technology
companies (including Mobile Network Operators (MNOs)) to cease and desist
providing server/hosting, or other key services such as connectivity to
disclosed or known lenders who are targets/subjects of investigation or
otherwise operating without regulatory approval.
“The inter-agency Joint Regulatory and Enforcement Task
Force has developed and mutually adopted a Limited Interim
Regulatory/Registration Framework and Guidelines for Digital Lending, 2022 as
the first and interim step to establishing a clear regulatory framework.’’
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