Payment system operators, or PSOs, like Flutterwave, Opay, Paystack, and Monify, as well as telecommunications firms, like Mobile Network Operators, or MNOs, in Nigeria have been ordered by the Federal Competition and Consumers Protection Commission, or FCCPC, to stop supporting the activities of illegal digital money lenders, also known as money sharks, in that country.
When the Commission conducted enforcement actions against a loan shark by the name of Soko Lending Limited yesterday in Lagos, Executive Vice Chairman/Chief Executive Officer of the FCCPC, Babatunde Irukera, revealed this. He also said that the FCCPC has obtained orders to disable or diminish violators’ ability to circumvent regulatory efforts to protect citizens.
He also disclosed that the inter-agency Joint Regulatory and Enforcement Task Force had created and adopted a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending as a first step in creating a precise regulatory framework for the industry.
According to him, Soko Lending is one of the most active violators of consumer privacy, fair lending conditions, and ethical loan repayment/recovery methods, with many applications and brand names controlling a sizeable portion of the digital/online lending market.
He remembered that the Commission had previously taken similar enforcement action that decreased exploitative behavior in the sector, but he also noted that certain lenders had developed strategies to get around the directives to freeze accounts and suspend apps.
Irukera went on to say, “The Commission has also entered further orders that will hinder or lessen violators’ capacity to design methods of evading the investigation’s goal and systems for defending individuals.”
“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.