Consumer Protection Commission Moves Against Unwholesome Practices by Digital Lenders
The Executive Vice Chairman of the Federal Competition and Consumer Protection Commission (FCCPC), Dr. Tunji Bello, has announced that the Commission has initiated measures to combat the increasing unethical practices by unregulated digital lenders.
The FCCPC has introduced the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations (DEON Consumer Lending Regulation), 2025, to address persistent consumer grievances and various issues associated with such digital lenders.
In a statement released on Wednesday, Dr. Tunji Bello elucidated that the framework demands transparency, fairness, responsible conduct, data privacy, and accessible redress mechanisms, all under the vigilant supervision of the FCCPC.
He emphasized that this is an essential stride towards regulating Nigeria’s swiftly expanding digital lending sector.
Dr. Bello articulated that the Regulations, formulated under Sections 17, 18, and 163 of the Federal Competition and Consumer Protection Act (2018), principally protect consumers by establishing a comprehensive framework to ensure transparency and accountability.
He remarked, “For far too long, Nigerians have suffered harassment, data breaches, and unethical practices by unregulated digital lenders. These new regulations delineate that while innovation is encouraged, it must not come at the cost of consumer rights, dignity, or the rule of law.
“This Regulation furnishes the legal instruments to hold violators accountable and to promote responsible digital finance. No consumer should be subjected to harassment, defamation, or be enticed into unsustainable debt under the pretense of digital lending.
“It also establishes a robust legal structure to register, monitor, and sanction all forms of digital and non-traditional lending in Nigeria. It applies to all unsecured consumer lending conducted through electronic, online, mobile, or other non-traditional means. The regulations outline explicit requirements for registration, transparency, data privacy, ethical recovery, fair interest rates, and responsible lending.
“Importantly, the Regulations prohibit pre-authorized or automatic lending, enforce clear and accessible loan terms, ban unethical marketing, and require local ownership of at least one service provider for airtime and data lending services.
“It also necessitates joint registration of all lender partnerships and prohibits monopolistic or dominance-based agreements without prior Commission approval. Under these provisions, all digital lenders must register with the FCCPC within 90 days of commencement.
“Approval hinges on adherence to consumer protection, data compliance, and transparency standards. Non-compliant operators face sanctions, which may include fines of up to N100 million or 1% of turnover, as well as potential disqualification of directors for up to five years.”
The FCCPC has urged all current and prospective providers of digital lending services, including Mobile Money Operators (MMOs), Digital Money Lenders (DMLs), and service partners, to familiarize themselves with the new guidelines and operate within them to avoid sanctions.
The Commission also encourages consumers to report unlawful or unregistered lenders, unfair interest rates, or privacy violations to the Commission through the approved registered channels.
