The Federal Government of Nigeria has shut down six illegal loan companies operating in the country.
The companies include GoCash, Okash, EasyCredit, Easi Moni, KashKash, and Speedy Choice among other illegal lending companies.
This is coming months after NITDA sanctioned another digital lending platform, SokoLoan.
According to the government, the digital loan companies have violated the privacy rights of Nigerian.
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Operatives of the Federal Competition and Consumer Protection Commission (FCCPC) shut down the illegal companies on Friday.
FCCPC was joined by the National Information and Technology Development Agency (NITDA) and the Independent Corrupt Practices and Related Offences Commission (ICPC).
The team of government agencies teamed with the Nigerian police to bust the illegal digital lending companies for violating consumers private rights.
The companies operated from their offices at Opebi Road in Ikeja, Lagos, Nigeria.
Why the raid:
FCCPC noted that the team raided and shut down the illegal companies following complaints against them from the public.
During the raid, the CEO at FCCPC, Babatunde Irukera, decried the illegal practices of the companies.
He said the pandemic forced some Nigerians to take loans from the companies.
However, the companies violated their private data rights while trying to recover their loans.
He said the agency launched investigation into the companies since 2020 following several petitions against them.
According to him, “This information started quite a while ago. When the country was on lockdown in 2020 due to the pandemic, we started seeing the rise of money lenders.”
“Because of the lockdown, people needed small and instant loans to sustain, which is understandable.
“But, over a period of time, people started to complain about the malpractice of the lenders so we started tracking it.”
Evidence against the digital loan companies:
According to Irukera, the digital loan companies charged interest rates that negated the ethics of lending.
He said the companies also have no permanent address as they changed office locations a lot.
People access their services through mobile apps that can be downloaded on both Google and Apple Stores.
Similarly, the illegal digital loan companies are not registered in Nigeria and they lacked operating licence.
Also, the companies, according to the agency’s boss, operated from one place.
He said this meant that one person was behind all the companies.
Irukera also said that the loan companies adopted unethical practices for loan recovery.
These practices, according to the agency’s head, violated customers’ privacy.
Unethical practices of loan recovery by the lending companies:
Recently, many Nigerians started raising concerns over the invasion of their privacy rights by illegal loan companies.
The companies would harass the relatives and loved ones of their customers all in the bid to recover loans.
They would also abuse and shame them and their acquaintances just to recover their loans.
A victim, Mr Nyatson complained about how one of the loan companies had called him to pay back a loan his son collected without his knowledge.
According to him, the loan companies frequently called his line even at odd hours while threatening him and his family.
He said “as I was trying to see what to do, my brother called me to say the same people called him on the same issue.”
This is one case among the thousands of cases that have arisen since 2020.
So, while the interest rates that these loan companies violate the consumer rights, their methods of loan recovery are equally unethical.
According to Irukera, “So, we started an investigation trying to determine the location of these firms, which has been very difficult.
“These companies move around a lot, and it took us several months visiting each of their locations,” he said.”
“And sometime last month, a court issued a warrant and between then and now, we were preparing a sting operation, which is what you are seeing here today.
“The reason for this is because we wanted to be sure we were hitting at the place where we could get many of them,”
Implications:
These loan companies have disgraced so many people all in the name of loan recovery.
Likewise, in the process of trying to recover their loans, they cause some emotional and psychological traumas to people.
Their interest rates also, sometimes, make it difficult for benefactors to pay back.
With the companies having no address in the country, they violated people’s rights at will.
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