Nigerians Express Outrage Over FairMoney’s Alleged Extortion Tactics in Loan Dispute

By: Bayero Ade

A recent controversy surrounding the money-lending app, FairMoney, has sparked widespread criticism across Nigerian social media platforms, particularly Twitter.

According to Afripost, the backlash began when a woman, intending to borrow ₦100,000, was mistakenly credited ₦1 million by the app. To her dismay, FairMoney demanded a repayment of ₦1.9 million over 11 months, resulting in a staggering 97.22% interest rate.

After attempting to cancel the loan, the borrower faced repeated disregard from FairMoney’s customer service. When she eventually succeeded in contacting them, she was told that the loan could only be canceled if she paid ₦1,188,845.84 within three days. If she failed to do so, the full repayment of ₦1,972,200 would be enforced.

This incident follows a similar controversy from the previous year, when another borrower, who sought a ₦2,500 loan, was mistakenly credited ₦2 million. Despite returning the funds promptly, she was still subjected to a 240% interest rate, demanding ₦6.8 million to be paid within a month. The public outcry led to the reversal of charges after significant pressure on the app.

The latest incident has reignited concerns about the legality of FairMoney’s practices, with many Nigerians questioning whether such high interest rates and repayment demands are in line with financial regulations.

FairMoney’s Response to Allegations

In response to the growing criticism, FairMoney released a statement clarifying its position. According to the company, the customer, Ijeoma, initiated a request to liquidate the loan, which is currently being processed.

FairMoney explained that customers are allowed to select their desired loan amount and are granted a three-day grace period to return any mistakenly credited funds without penalties or interest. In Ijeoma’s case, however, FairMoney stated that a large portion of the ₦1 million was already used, exceeding the original ₦100,000 requested. As a result, the company treated this as a loan liquidation and provided her with a settlement amount of ₦1,118,845.84.

The app also confirmed that Ijeoma had made the necessary payment and that the loan closure would be completed within 24-48 hours.

Despite the clarification, public frustration remains high, with many Nigerians demanding stricter regulation of digital lending platforms to prevent what they perceive as exploitative practices.