The Federal Competition and Consumer Protection Commission (FCCPC), has barred all financial technology companies (Fintechs) to stop providing payment or transaction services to digital money lenders under its investigation.
Some of the FinTechs barred from offering such services include; Flutterwave, Opay, Paystack and Monify.
Babatunde Irukera, Executive Vice Chairman spoke to reporters on Thursday during enforcement at the premises of some lenders in Lagos.
Irukera directed FinTechs including Flutterwave, Opay, Paystack and Monify to desist from servicing digital lenders under probe.
Additionally, Mobile Network Operators (MNOs) were asked to stop providing server, hosting or other services to the companies.
Irukera informed the public that the Federal High Court already empowered the commission to search and seize properties of subjects of investigation.
“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 covers a significant share of the digital or online lending market, and is one of the most prolific actors in violating consumer privacy, fair lending terms and ethical loan repayment/recovery practices”, he said.
The FCCPC recalled that the commission, on March 11, 2022, carried out a similar enforcement with respect to multiple lenders.
Irukera observed that the agency’s action had reduced the unethical, obnoxious and unscrupulously exploitative practices in the industry.
He disclosed that some of the lenders who had been subject of investigation had devised dubious strategies to leverage on technology and other financial services alternatives to circumvent account freezing and app suspension orders.
“With the raid today, the commission expects appreciable and additional reduction in these unacceptable practices.
“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,” Irukera added.
According to him, the Order requires permission to proceed in digital lending; it provides a limited moratorium period for existing businesses to comply in order to continue in digital lending.
“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,” the FCCPC boss said.
