…As GoCash, OKash, EasyCredit, Kashkash, Speedy Choice, Easy Moni, Sokoloan Get Shut Down
The federal government, on Friday, raided the offices of “illegal” digital loan companies operating in Ikeja, Lagos over alleged consumer rights abuse.
The operation was led by the Federal Competition Consumer Protection Commission (FCCPC) in conjunction with the Independent Corrupt Practices and Other Related Offences Commission (ICPC), the National Information Technology Development Agency(NITDA) and the Nigeria Police Force (NPF).
The affected digital loan companies are GoCash, OKash, EasyCredit, Kashkash, Speedy Choice, Easy Moni, and Sokoloan.
Speaking with journalists, Babatunde Irukera, FCCPC executive vice chairman, said the raid was in response to customers’ complaints of malpractices by the digital loan financial institutions.
He said customers had accused the financial institutions of violating their privacy in their debt recovery drive.
He said the agency had begun investigations into the allegations since 2020.
“This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders,” Irukera said.
“Because there was lockdown due to the pandemic, people needed small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it.
“Towards the end of last year, we gathered quite a lot of information. We started working with some other key agencies and the FCCPC led the meeting where we all agreed there would be a joint effort to look into these businesses.”
Irukera said the cause of concern was the naming and shaming of borrowers and violation of their privacy with respect to how the loans are recovered.
“Secondly the interest factor seems to be a violation of the ethics on how lending is done. So those were the two things that we set out to look for,” he said.
Irukera said the agency has been monitoring the activities of the firms for several months, adding that it was difficult to identify their operational base.
He said investigations revealed that the loan firms were neither Nigerian companies nor registered in the country.
“We found out that most of these companies operate from the same place. We also found out that many of them are actually operated by the same person,” the FCCPC boss said.
“They are not Nigerian companies, they don’t have an address in Nigeria and they are not registered in Nigeria with the Corporate Affairs Commission and they do not have any licence to do their business.”
Highlighting steps taken by the commission, Irukare said the FCCPC obtained a court warrant to proceed with a “search and seizure”.
He said the commission had written to global app companies, asking them to shut down the loan companies’ apps.
“In addition to what you are seeing here today, the FCCPC has also issued multiple orders today,” he explained.
“Two of them are going to vendors: Apple and Google stores where some of these apps are available. We have asked them to shut these companies’ apps down so that people will not be victimised anymore.
“Secondly, some of them (the orders) have gone to the banks, asking them to freeze the accounts used by these people.”
“I must add though that not all digital loan money lenders are operating illegally and that is why it has been taking time for us to track these people.
“It doesn’t mean that the people we are proceeding against today are the only ones, but these are where we have information now and we want to start with them.”
The FCCPC chief said the commission would restrain the digital loan business of those that are found wanting and freeze their accounts.
He advised the public not to do any business with them.