FSRCC, NBC Raise the Alarm over Activities of Illegal Financial Operators

James Emejo in Abuja

The Financial Services Regulation and Coordinating Committee (FSRCC), and the National Broadcasting Commission (NBC), have expressed worry over the rising activities of Illegal Financial Operators (IFOs) in the country.

In a joint statement, which was posted on the website of the Central Bank of Nigeria (CBN), both parties noted that the development portends grave risk to the public confidence and stability of the Nigerian financial system.

The FSRCC and NBC in their continuing efforts to end the scourge of IFOs in Nigeria, further issued advisory urging Nigerians to refrain from dealing with unlicensed or illegal financial operators, who lure and defraud unsuspecting members of the public by offering extra­ordinary returns on investments as bait.
They also advised Nigerians to verify the licensing status of such companies and schemes on the relevant websites including NDIC, CBN, PenCom, SEC, and NAICOM before investing in them.

The statement further urged the public to report any individual or entities suspected to be involved in such nefarious activities to law enforcement agencies.
It added that member agencies will continue to engage in regular sensitisation campaigns on the threats posed by the activities of illegal financial operators.
The regulatory clampdown on IFOs had been intensified in recent times.

The Executive Vice Chairman/Chief Executive of the Federal Competition and Consumer Protection Commission (FCCPC), Mr. Babatunde Irukera, had in November 2021 disclosed that the commission was partnering with CBN, Independent Corrupt Practices Commission (ICPC), the National Information Technology Development Agency (NITDA) and the Economic and Financial Crimes Commission (EFCC) to address multiple potentially dubious conduct of certain money lenders, otherwise known as loan sharks.

A loan shark implies a money lender who charges extremely high rates of interest, typically under illegal conditions.
Irukera said the joint investigation followed continuing complaints about questionable repayment enforcement practices including public shaming and violations of privacy, arbitrary, unjust, unreasonable, or exploitative interest rates and or loan balances calculations, harassment, and failure of consumer feedback mechanisms.

He said the development had resulted in significant and understandable consumer aggravation and dissatisfaction.
He said initial inquiries demonstrated that many of the purported money lenders are not legally established or licensed by the appropriate authorities to engage in the services they ostensibly provide.

He explained that at a recent meeting with the regulatory and anti-graft agencies, the parties resolved to collaborate and pursue urgent enforcement action against already known violators while investigating others, as well as criminal prosecutions where applicable.
He added that a joint task force of analysts and enforcers was also created and immediately activated.

Irukera, in a statement, added, “The agencies recognise and welcome products and providers that bridge or close the lending gap to consumers who would otherwise be ineligible for conventional loans from traditional financial institutions, as well as the scalability and ease of access to financing for many people. However, this must occur within legally acceptable parameters of transparency and fairness.

“In furtherance of resolutions from the meeting, and the commission’s role in coordinating the government’s response, the commission has created a dedicated email address to receive complaints, and or any information about any experiences, identity of businesses or individuals involved in these practices, or any other relevant information that may be helpful to the investigation.”