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FCCPC slams ₦100m fine on rogue loan apps - moves to end harassment

The Federal Competition and Consumer Protection Commission (FCCPC) has introduced comprehensive regulations to curb harassment, data breaches, and unethical practices by digital lenders across Nigeria.

The new framework, known as the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulation (DEON Consumer Lending Regulation) 2025, took effect on 21 July. It seeks to safeguard consumers in Nigeria’s rapidly expanding digital credit sector.

FCCPC’s Executive Vice Chairman/Chief Executive Officer, Tunji Bello, who unveiled the rules in Abuja on Wednesday, described the initiative as a decisive step to protect citizens from predatory lenders.

“For too long, Nigerians have endured harassment, data breaches, and unethical practices by unregulated digital lenders.

“These regulations draw a clear line that innovation is welcome, but not at the expense of the rights and dignity of consumers or the rule of law,” Bello said.

He stressed that the rules provide “the legal tools to hold violators accountable and promote responsible digital finance,” adding that “no consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending.”

How We Got Here

Digital lending apps have proliferated rapidly in Nigeria, offering instant credit with minimal red tape, which is especially appealing to the underbanked.

However, consumer reports soon exposed a darker side: predatory interest, data misuse, and tactics like shaming defaulters via WhatsApp blasts and calls to friends, family or employers.

Investigations and academic studies reveal that such debt-recovery methods often cause psychological trauma, depression, anxiety, even suicidal ideation, in borrowers who’ve been publicly humiliated or cyberbullied.

Heavy Sanctions for Defaulters

Under the new rules, all digital lenders must register with the FCCPC within 90 days of commencement.

Registration will be approved only if operators meet standards of transparency, data compliance, and consumer protection.

Defaulters risk sanctions of up to ₦100 million or 1% of annual turnover, alongside possible disqualification of directors for up to five years.

The regulations prohibit automatic or pre-authorised lending, outlaw unethical marketing tactics, and compel lenders to present loan terms in clear and accessible language.

The DEON Regulations derive their authority from Sections 17, 18, and 163 of the Federal Competition and Consumer Protection Act (2018), which establish provisions for transparency, fair rates, data privacy, and consumer redress.

This aligns with broader national policy emphases on digital economy growth and consumer safeguarding, aiming to balance financial inclusion with fundamental rights, especially as fintech becomes central to Nigeria’s economic modernisation.

 What It Means for Borrowers

Airtime and data lenders must have at least one locally owned service provider, while partnerships between lenders require joint registration.

The Commission has also urged Mobile Money Operators (MMOs), Digital Money Lenders (DMLs), and service partners to obtain application forms and compliance guidelines.

Consumers are encouraged to report unlawful lenders, exploitative interest rates, or privacy violations to the relevant authorities.

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