The Federal Competition & Consumer Protection Commission (FCCPC), has warned Flutterwave and other financial technology (fintech) companies against supporting loan apps under investigation for harassing their customers.
During an enforcement action on premises used for illegal online money lending in Lagos, FCCPC’s Executive Chairman, Babatunde Irukera said going by the commission’s directive, Flutterwave, Opay, Paystack, and other fintech firms, would cease to render payment services to the loan apps.
Speaking further, the FCCPC chief disclosed that the commission as well ordered telecommunication companies to desist from providing server services to lenders who are subjects of investigation.
“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 known lenders who are targets, subjects of investigation or otherwise operating without regulatory approval,” he said.
Irukera also hinted that FCCPC has a framework underway that would prohibit the registration of such apps on Google.
“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.
“So one of the things that is coming up today is interim framework where Google will not put up any app business in Nigeria unless they show some regulatory approval. That means we have looked at their businesses and operating procedures and seen that they comply with the law. The privacy laws, consumer protection and fairness requirements before will put them on the play store,” he explained.
Why FCCPC is cracking down on illegal loan apps
In order to assist customers with urgent needs, quite a number of loan apps have been established for the sole purpose of providing short-term credits.
However, while these loan apps offer the services they were established for, they have in recent months resorted to unprofessional measures like cyberbullying, harassment, and breach of data privacy of their customers, who may have defaulted on their debt servicing.
Findings by BizWatch Nigeria unraveled that people prefer them when compared to conventional banks because they don’t require collateral and proper documentation.
