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FCCPC Bars Flutterwave, Opay, and Others From Providing Services To Online Loan Sharks

FCCPC Bars Flutterwave, Opay, and Others From Providing Services To Online Loan Sharks

FCCPC Bars Flutterwave, Opay, and Others From Providing Services To Online Loan Sharks

FCCPC Bars Flutterwave, Opay, Others From Providing Services To Online Loan Sharks

All financial technology companies (FinTechs) are prohibited from offering payment or transaction services to online money lenders that are the subject of the Federal Competition and Consumer Protection Commission’s (FCCPC) inquiry.

It was claimed that the listed FinTechs, including Flutterwave, Opay, Paystack, and Monify, were either operating payment systems and offering services to these online lenders while it was conducting its inquiry or were doing so without the necessary regulatory permissions.

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A few months prior, the commission had instructed Google and Apple to pursue the removal of these money lending applications from their stores if there was established proof of illegal behavior or usage of the program in violation of consumer rights.

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FCCPC Bars Flutterwave, Opay, and Others 

This was revealed by the Executive Chairman of the FCCPC, Mr. Babatunde Irukera, during a conversation with journalists on Thursday in Lagos while conducting an enforcement operation against some of the digital money lenders.

Irukera claimed that the commission also instructed mobile network operators (MNOs), among other telecommunication and technology firms, to stop offering server, hosting, and other essential services, like connection, to such declared or known lenders.

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From FCCPC Executive Vice Chairman is saying

Irukera said, “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.

“It is covering a significant share of the digital or online lending market, and one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices.

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“Prior to this operation, the commission had previously, on March 11, 2022 carried out a similar enforcement action with respect to multiple lenders; which action and continuing investigation has reduced previously high and escalating unethical, obnoxious and unscrupulously exploitative practices in the industry.’’

The head of the FCCPC said that some of these online lenders under investigation had developed strategies to work around account freezing and app suspension orders by utilizing technology and other financial service alternatives.

He said, “With the operations today, the commission expects appreciable additional reduction in these unacceptable practices.

FCCPC Bars Flutterwave, Opay, and Others 

“The commission has also today entered further Orders that will disable or diminish violators’ ability to devise circumvention efforts or alternative mechanisms to circumvent the objective of the investigation and protection of citizens.’’

Going further, he said the Order requires permission to proceed in digital lending and provides a limited moratorium period for existing businesses to comply in order to continue in digital lending.

Irukera added, “The guidelines also mandate different service providers in the relevant ecosystem such as banks, access/download platforms or stores, technology providers and payment systems to require regulatory approval before providing services.

“The commission expresses its gratitude to victims and citizens who have provided information or contributed to the investigation; and welcomes the continuing engagement that provides the relevant information or intelligence through the already established and publicised channels.’’


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IBEH C. JOE

Financial analyst, Entrepreneur, Blogger and Business model

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