Nigerian Government Shuts Illegal Online Banks, Freezes Business Accounts Over Customer Privacy Violation

The Nigerian Government on Friday raided the offices of “illegal” digital loan companies operating in Ikeja, Lagos, over alleged consumer rights abuse.

The operation was led by the Federal Competition Consumer Protection Commission in conjunction with the Independent Corrupt Practices and other related offences Commission, the National Information Technology Development Agency and the Nigeria Police Force.

The affected companies are GoCash, OKash, EasyCredit, Kashkash, Speedy Choice, Easy Moni, and Sokoloan.

At the Sokoloan, which occupied two floors at 21 Opebi Road and was alleged to be owned by Chinese businessmen, the workers refused to open their doors and constrained the FCCPC operatives to break their locks.

Speaking during the raid, the Chief Executive Officer of FCCPC, Babatunde Irukera, explained that customers had accused the financial institutions of violating their privacy in their debt recovery drive.
He said the agency had begun investigations into the allegations since 2020.

He said, “This information started quite a while ago. Some time ago, when the country was on lockdown in 2020 due to the pandemic, we started seeing the rise in money lenders.

“Because there was lockdown due to the pandemic, people needed small easy loan which is understandable. But over a period of time, people started complaining about the malpractices of the lenders, so we started tracking it.

“Towards the end of last year, we gathered quite a lot of information. We started working with some other key agencies and the FCCPC led the meeting where we all agreed there would be a joint effort to look into these businesses.”

According to Irukera, the interest rate charged by online financial institutions appear to violate the ethics of how lending is done.

He further said, “The key two things that were subject of concern were what seems to be the naming and shaming violation of people’s privacy with respect to how these lenders recover their loans.

“Secondly, the interest rate seems to be a violation of the ethics on how lending is done. So, those were the two things that we set out to look for.