Digital money lender Soko, others banned from providing lending services

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JThe Federal Competition and Consumer Protection Commission (FCCPC) said it has ordered all financial technology companies (FinTechs) to stop providing payment or transaction services to digital money lenders under his investigation.

Mr. Babatunde Irukera, Executive Vice Chairman of the commission revealed this to reporters on Thursday during an enforcement action against some of the digital money lenders in Lagos.

He identified such FinTechs as Flutterwave, Opay, Paystack and Monify that operate payment systems and provide services to those digital lenders under his investigation or not operating with applicable regulatory approvals.

Irukera said the commission also ordered telecommunications and technology companies, including mobile network operators (MNOs), to stop providing servers, hosting or other key services such as connectivity to such disclosed or known lenders.

According to him, the Federal High Court empowers the commission to search and seize properties from the premises of targets and subjects of investigation. This, he said, made the commission charged with enforcing the law against a company, widely known as Soko Lending Ltd.

“The information available to the commission demonstrates that Soko Lending appears to be the largest digital money lender with multiple applications and brand names. It covers a significant portion of the digital or online lending market and one of the more prolific in violating consumer privacy, fair lending terms, and ethical loan repayment/collection practices.

“Prior to this operation, the commission had previously, on March 11, 2022, taken similar enforcement action against several lenders; whose action and continued investigation have reduced the unethical, heinous and unscrupulous operating practices previously high and growing in the industry,” he said.

He said, however, that some of the lenders who were investigated had developed methods to leverage technology and other financial service alternatives to circumvent account freezing and credit suspension orders. ‘apps.

“With today’s operations, the commission expects a significant further reduction in these unacceptable practices. The commission also issued new orders today that will disable or diminish the ability of violators to devise circumvention efforts or alternative mechanisms to circumvent the purpose of investigating and protecting citizens,” Irukera added.

According to him, the Order requires authorization to proceed with the digital loan; it provides a limited moratorium period for existing businesses to comply in order to continue lending online.

“The guidelines also oblige 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 the victims and citizens who provided information or contributed to the investigation; and welcomes the continued commitment that provides the relevant information or intelligence through the channels already established and made public,” the FCCPC boss said.

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