By Olumide Benson
With the persistent and frantic effort of the Federal Competition and Consumer Protection Commission being the apex body of agencies in the Country saddled with the responsibility to regulate trade to protect consumers, one would have thought that the evil days of fraudulent and unethical practises of the Nigerian loan App is past gone, rather it is to be said that a new era with new tactics of an advance fraud system has just emerged.
In recent time, the emergence of loan apps within the Nigerian financial trading space has become not just numerous but worrisome to the extent that the majority of the loan apps have no traceable physical address. In fact, it is a deliberate tactic employed by majority to intentionally make it difficult to prevent regulatory bodies from effectively reaching out to them.
They’re making punitive measures difficult to effect in cases of malpractices, as a result, they adopted the system of only including emails and phone numbers, even non-existent phone numbers that they are ordinarily expected to display for accessibility and publicity.
More so, the apex bank regulating all financial trading in Nigeria with the Federal Competition and Consumer Protection Commission should henceforth see the need to make public the standard ethics that is expected from every loan app including the highest interest rate pegged for a stipulated loan duration in order for consumers to be able to make informed decision.
The systematic deception has currently taking over the trade, making it one of the most lucrative business with every “Tom and Jerry” in Nigeria owing a loan app to explore and defraud unsuspecting citizens.
It is no news that the loan apps now offer loans to Nigerians as high as thirty-five to fifty percent interest rate within a duration of 7 days and maximum of 14 days, a profit that even Crude oil trading business does not generate within such a ridiculous duration.
The height of it is the inhumane, barbaric and unethical operational system that they have deliberately put in place to ensure that customers are forced to effect payment at all cost within that short duration regardless of any force majeure or unexpected act of man.
In fact, some corporate organisations with such trading licence have adopted the system of partnering with several individuals who will manage and operate the loan app as an entity, thereby distancing it from the parent company so that they can adopt all forms of barbaric and inhumane strategy to ensure that there is no default on the side of the customers.
They easily boycott the laid down procedures of the loan retrieval and adopt the tool of harassment and defamation by sending malicious messages to phone contacts they were able to access from customers’ phone while inputting their data during registration on the loan app, contrary to the data protection laws.
A first-hand experience with a loan app- Tloan, owned by Giasun Technology Nigeria Limited unravelled the unholy hidden interest rate where a loan will be awarded at thirty-five percent interest rate on a maximum period of 14 days to be repaid instal mentally within 7 days interval, yet a default in the first instalment will still attract one percent daily rate even when the span of the entire loan is not yet exhausted. The funny thing is that any default on the last instalment will continue to attract a daily rate of another one percent of the total borrowed amount even though over fifty percent of the loan had previously been paid.
This is a very fraudulent and unethical practise that no financial institution anywhere in the world will or should encourage. All effort to see that this fraudulent practise is corrected by this loan app was met with a repulsive position; hence, the onus lies on the apex bank and other concerned regulatory bodies to ensure that the public are fully abreast of the stipulated interest rate alongside repayment duration approved as the standard practise to check the excesses of the loan apps so that the primary purpose of the licensing which is to serve an immediate and access to fund by average Nigerians will continue to be achievable instead of the unarmed robbery scheme the owners and operators of these apps have turned it to.
More so, every loan apps should be made to bear no other name but that which can be associated with their parent company name for easy identification and connectivity, to prevent the barbaric system of operations by loan app owners and operators.
I also suggest that licensing processes should be further tightened to enable healthy competition and high standard practise which will prevent harassment of customers and enhance the ability of loan app owners and operators to be buoyant enough and employ due process of recovery as ethically laid down with the protection of the customers fundamental rights.
Olumide Benson, a concerned Nigerian wrote in via email.
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