Nigerian government shuts down 6 illegal digital loan companies

On Friday, 3 Nigerian federal government agencies – the Federal Competition and Consumer Protection Commission (FCCPC), the National Information and Technology Development Agency (NITDA) and the Independent Trade Practices Commission Corruption and Related Offenses (ICPC) – collaborated with the Nigerian Police to raid certain illegal financial institutions operating from their offices at Opebi Road in Ikeja, Lagos, Nigeria.

According to Punch, digital lending platforms like GoCash, Okash, EasyCredit, Easi Moni, KashKash and Speedy Choice were among the bankrupt companies.

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The FCCPC, which led the joint operation, said the raid was a response to complaints from several customers about wrongdoing by financial institutions.

Speaking at the raid, FCCPC CEO Babatunde Irukera said the agency began investigating and monitoring these companies in 2020 when consumers began accusing them of mishandling and breaching their private data. in the loan recovery process.

“This information started quite a long time ago. When the country was in lockdown in 2020 due to the pandemic, we started to see the rise of money lenders,” Irukera said. “Because of the lockdown, people needed small instant loans to support themselves, which is understandable. But, over time, people started complaining about lender malpractice, so we started tracking it.

Irukera also mentioned that towards the end of last year, the agency had collected a lot of information and started working with other key agencies to monitor these companies.

According to Irukera, their findings so far are: the interest rate charged by these digital lenders appears to violate the ethics of how loans are made; second, the unethical loan collection practice of violating the privacy of clients to abuse and shame them and their acquaintances.

“So we launched an investigation to try to determine the location of these companies, which was very difficult. These companies move around a lot and it took us several months to visit each of their sites,” he said.

The FCCPC boss, however, said the investigations also revealed that the loan companies were neither Nigerian nor registered in the country, they do not have an address or a license to do business in Nigeria. . He also said most of these businesses were operated from the same location and by the same person.

Without an address, all of these companies have mobile apps downloadable from Google and Apple Store. So the agency had to hire the people who were their victims and gather more evidence.

To date, all of the agencies involved had obtained enough information and evidence to convince the court to issue a warrant authorizing them to investigate a search and seizure.

“And last month a court issued a warrant and in the meantime and now we were preparing an undercover operation, that’s what you see here today. The reason for that is that we wanted to be sure that we were hitting where we could get a lot of it,” the FCCPC boss said.

He also mentioned that the agency had ordered Apple and Google to remove those companies’ apps from their platforms. It also ordered banks to freeze the bank accounts of these companies.

Last year, when NITDA sanctioned Sokoloan, TechCabal reported that it would be the first in a long series. Although it took longer than expected, it is finally happening.

“It also doesn’t mean that the people we’re suing today are the only ones, no. We want to start with them. We also understand that there are between 5 and 7 companies operating in one place,” Irukera said, alluding to the agency’s ambition to cleanse the country of all illegal digital lending practices.

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