The Federal Government (FG) has banned all telecommunication companies, and payment systems operators such as Flutterwave, Opay, Paystack, and Monify from providing transaction services to illegal online money lenders, also known as loan sharks.
This was announced in a statement titled, “Further and Continuing Investigation of Rights Violation in Money Lending Industry and Release of Interim Regulatory Framework” issued by the Executive Vice Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Babatunde Irukera.
Irukera said, “The FCCPC has ordered all operating payment systems including Flutterwave, Opay, Paystack, and Monify to immediately cease and desist from providing payment or transaction services to lenders under investigation or not otherwise operating with applicable regulatory approvals.
“The Commission has also ordered telecommunication/technology companies (including Mobile Network Operators) to cease and desist providing server/hosting, or other key services such as connectivity to disclosed or unknown 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”.
Irukera said the Commission also conducted enforcement actions regarding multiple online loan companies in Lagos State on March 11, 2022, to reduce reported increasing unethical and exploitative practices plaguing the industry.
According to him, “Specifically, intelligence gathered including over a significant period of surveillance as well as renewed orders of the Federal High Court empowering the Commission to search and seize properties from premises of targets/subjects of investigation, the Commission enforced against a company widely known as Soko Lending Limited.
“The information available to the Commission demonstrates that 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”.
