The rise of digital money lending platforms in Nigeria has brought both convenience and challenges to borrowers. It is important to acknowledge that online money lending platforms gained significant prominence during the COVID-19 lockdown. With many Nigerians staying indoors and in need of cash, online lending platforms emerged everywhere to great relief.
To many a Nigerian, at that time, it was a welcome phenomenon that brought succour to most people who saw it as a lifeline that eased the economic hardship imposed on the populace by that dreaded pandemic. Like all good things, soon, abuse set in and unscrupulous elements turned what was intended to be a lifesaver into a nightmare of sorts.
Unfortunately, alongside providing quick loans for individuals in need, there has been a disturbing trend of harassment and defamation of customers by certain lenders. Disturbing incidents have occurred, such as innocent citizens being harassed with incessant calls instructing them to contact the debtors. Additionally, messages have been sent falsely claiming that the debtor has HIV or AIDS.
One particularly extreme case took place last year when a customer exposed a loan app after they published an obituary declaring him dead. The customer in question, expressed his shock when he discovered that an obituary with his name and face had been posted online. According to the obituary, he had allegedly “passed away” on January 4, 2022, and his burial was scheduled for the end of the month. Another victim also shared her experience of harassment by a loan app on a public Facebook group.
These instances of harassment by online lending companies are numerous and need to be halted. It is imperative that this harassment is brought to an end. It is gratifying to note that the Federal Competition and Consumer Protection Commission (FCCPC) has taken a firm stance against online loan sharks.
In a recent interview, FCCPC’s CEO, Babatunde Irukera, announced the agency’s commitment to shutting down digital lenders who engage in harassment and slander of customers. The FCCPC’s determination to permanently delete digital money lending apps that harass and slander customers from the Google Play Store should send a strong message to those desperate lenders.
In the considered opinion of this newspaper, online loan sharks who engage in unethical practices need to understand that they will face consequences for their actions. The commission’s CEO rightly emphasised that while ethical lenders are welcome to do business in the country, those who cross the line and exploit or harass consumers will be promptly dealt with.
By taking decisive action, the FCCPC is safeguarding the rights and well-being of Nigerian consumers. Borrowers should not be subjected to harassment or defamatory messages when seeking financial assistance. It is crucial for regulators to intervene and ensure that the digital lending industry operates within a framework of fairness and respect.
No doubt, the FCCPC’s commitment to permanently delete apps found guilty of harassing consumers is a necessary step towards guaranteeing that lenders and borrowers operated on fair grounds.
It is important to acknowledge the fact that the majority of individuals who struggle to repay loans are not chronic borrowers but rather people who faced with genuine financial hardships sought for and received the assistance the so urgently needed. It is sad, in our view, that the predatory actions of online loan sharks are beginning to exacerbate their difficulties, creating a cycle of fear and despair.
The FCCPC’s determination to root out these unethical practices will go a long way in restoring confidence in the digital lending sector and providing relief to borrowers.
While it is crucial to hold online loan lenders accountable, it is equally important to ensure that the regulatory approach does not stifle innovation or hinder the growth of responsible lending practices. The FCCPC should work closely with ethical digital lenders, creating a framework that encourages responsible behavior and consumer protection.
By distinguishing between lenders who operate within ethical boundaries and those who engage in harassment, the commission can foster an environment where innovation and consumer welfare coexist. Striking the right balance is key to nurturing a thriving digital lending ecosystem that benefits both lenders and borrowers.
To effectively prosecute online loan sharks and eradicate their harmful practices, it is essential for the FCCPC to collaborate with other relevant government agencies, such as the Central Bank of Nigeria (CBN), to share information and coordinate efforts. Regular monitoring of the digital lending space will enable swift action against violators.
Furthermore, raising awareness among consumers about their rights and providing channels for reporting harassment or unfair treatment will empower borrowers and ensure that their voices are heard.
The FCCPC can also work with industry stakeholders to establish self-regulatory mechanisms that promote ethical practices and protect consumers’ interests. With robust monitoring mechanisms in place, Nigeria can pave the way for a sustainable and consumer-friendly digital lending industry, free from the clutches of harassment and exploitation.
