CREDICORP WARNS LENDERS AGAINST HARASSING, HUMILIATING BORROWERS

Read Time:1 Minute, 13 Second

By; Sunmola Ganiyat

The Nigerian Consumer Credit Corporation has warned lenders against using harassment, threats or public humiliation to recover unpaid loans, stressing that debt collection must comply with the law and respect borrowers’ dignity.

CREDICORP issued the warning in a statement on Thursday, listing threats, verbal abuse, contacting borrowers’ relatives or employers and publicly shaming debtors on WhatsApp or social media among practices lenders must avoid.

The corporation stressed that defaulting on a loan does not amount to a criminal offence and does not strip borrowers of their rights.

“Being in debt is not a crime, but unfair treatment is,” CREDICORP said.

It noted that Section 34 of the Nigerian Constitution protects the dignity of every person, while the Federal Competition and Consumer Protection Commission’s lending framework prohibits intimidation and violations of borrowers’ privacy.

CREDICORP advised borrowers who experience abusive debt recovery practices to document the incidents and report them to the FCCPC or the Central Bank of Nigeria.

The corporation also reminded Nigerians that taking a loan involves more than considering the interest rate, urging prospective borrowers to assess the total cost of credit, repayment conditions and the purpose and potential value of the loan.

“A loan is more than just an interest rate,” it said, advising consumers to consider the full implications of borrowing before taking on debt.

CREDICORP clarified that the guidance was issued for informational purposes and should not be regarded as legal advice or official policy guidance.