NEWS
FCCPC Court Victory Strengthens Consumer Protection as Digital Loan Borrowers Gain New Rights
Millions of Nigerians who rely on digital loan applications are set to benefit from stronger consumer protection following a landmark judgment by the Federal High Court in Lagos.
The court dismissed a suit filed by the Wireless Application Service Providers Association of Nigeria (WASPAN), thereby reaffirming the Federal Competition and Consumer Protection Commission’s (FCCPC) authority to enforce the Digital, Electronic, Online or Non-Traditional Consumer Lending Regulations (DEON Regulations 2025). The ruling is expected to reshape the operations of digital lenders across the country by strengthening consumer rights and promoting responsible lending practices.
Among the major changes introduced by the judgment are:
1. Contact-Shaming and Harassment Declared Illegal:
Digital loan providers are no longer permitted to send embarrassing or defamatory messages to a borrower’s family members, friends, colleagues or employer in an attempt to recover debts. They are also barred from exploiting customers’ contact lists to intimidate or shame them. The FCCPC now has the authority to investigate violators, impose sanctions and shut down operators that fail to comply with the regulations.
2. Improved Data Privacy for Borrowers:
Loan applications are now restricted to collecting only information necessary to assess a customer’s creditworthiness. Unauthorised access to contacts, photographs, videos, location data or other personal information is considered a breach of the regulations. Digital lenders found guilty of such violations risk heavy penalties, fines and possible revocation of their operating licences.
3. Greater Transparency in Loan Charges:
Under the strengthened regulations, lenders must clearly disclose interest rates, Annual Percentage Rates (APR), processing fees and repayment terms before borrowers accept any loan offer. Hidden charges, misleading loan terms and exploitative debt rollover practices could now attract regulatory action from the FCCPC.
4. Illegal Loan Apps Risk Removal from App Stores:
The FCCPC has also been empowered to collaborate with Google, Apple, banks and payment service providers to remove unregistered or non-compliant loan applications from digital platforms. In addition, the Commission can freeze payment channels linked to illegal lending operations to prevent further violations.
5. Borrowers Now Have a Clear Complaint Mechanism:
Consumers who experience harassment, privacy violations or unlawful debt recovery practices can now report offending digital lenders directly to the FCCPC. Borrowers are encouraged to provide supporting evidence, including screenshots, voice recordings and other relevant materials, to aid investigations and enforcement actions.
What the Judgment Means:
While the ruling significantly strengthens consumer protection, it does not cancel legitimate debts. Borrowers remain legally obligated to repay loans and agreed interest under valid loan agreements. However, the judgment marks a major step toward ensuring that digital lending in Nigeria operates within the law, respects consumers’ privacy, maintains transparency in loan terms and treats borrowers with dignity and fairness.