CREDICORP Nigeria: Unlawful Debt Recovery Warning to Lenders

• The Nigerian Consumer Credit Corporation (CREDICORP) has warned lenders against harassing or humiliating borrowers over unpaid loans.
• Prohibited debt recovery tactics include threats, abuse, contacting third parties like family or employers, and public shaming on social media.
• CREDICORP emphasized that being in debt is not a crime and borrowers retain their rights, citing Section 34 of the Nigerian Constitution and the FCCPC lending framework.
• Borrowers experiencing misconduct are advised to document incidents and report them to the Federal Competition and Consumer Protection Commission (FCCPC) or the Central Bank of Nigeria (CBN).
• This guidance follows an earlier CREDICORP advisory for Nigerians to consider the full implications of loans beyond just interest rates.

The corporation unequivocally stated that falling into debt does not strip borrowers of their fundamental rights, nor does it grant lenders license for harassment.

The Nigerian Consumer Credit Corporation (CREDICORP) recently issued a significant warning to lenders, emphasizing the imperative for lawful and respectful debt recovery practices. This directive, released on a Thursday, specifically cautioned against methods that harass or humiliate individuals who have outstanding loans. The corporation underscored that while falling behind on repayments is a financial obligation, it does not equate to a criminal offense.

CREDICORP outlined several practices that are strictly prohibited in the realm of debt collection harassment Nigeria. These include issuing threats, engaging in abusive language, contacting borrowers' family members or employers, and publicly shaming debtors through platforms like WhatsApp or other social media channels. The agency stressed that debt recovery must adhere to established collection protocols, ensuring that consumers' dignity is preserved throughout the process.

Underpinning CREDICORP's stern advisory is a clear legal and regulatory framework designed to protect borrower rights Nigeria. The corporation explicitly referenced Section 34 of the Nigerian Constitution, which enshrines the fundamental right to the dignity of the human person. This constitutional provision serves as a cornerstone, affirming that individuals retain their inherent worth and protections even when facing financial difficulties.

Furthermore, the FCCPC lending framework debt recovery guidelines are cited as prohibiting intimidation and violations of privacy. This regulatory stance reinforces the principle that lenders must operate within ethical and legal boundaries, regardless of a borrower's default status. CREDICORP reiterated that being indebted is not a crime, but rather, unfair treatment of debtors constitutes a serious breach of established norms and legal protections. The corporation unequivocally stated that falling into debt does not strip borrowers of their fundamental rights, nor does it grant lenders license for harassment.

For borrowers who believe their rights have been infringed upon during debt recovery efforts, CREDICORP provided clear guidance. The corporation advised individuals to meticulously document any alleged misconduct by lenders. This documentation is crucial for substantiating claims of harassment or other unlawful practices.

Once misconduct is documented, affected borrowers are encouraged to report these incidents to the appropriate regulatory bodies. Specifically, the Federal Competition and Consumer Protection Commission (FCCPC) and the Central Bank of Nigeria (CBN) are designated as the channels for lodging such complaints. This mechanism ensures that there is recourse for individuals subjected to improper debt collection tactics, reinforcing the commitment to upholding borrower rights.

This recent CREDICORP Nigeria unlawful debt recovery warning follows earlier guidance aimed at fostering more responsible credit engagement among Nigerians. Previously, the corporation had urged prospective borrowers to look beyond just interest rates when considering a loan. It highlighted the importance of evaluating the comprehensive implications of taking on debt.

CREDICORP advised individuals to assess the full cost of credit, the specific repayment terms, the potential benefits the funds could achieve, and the overall value they might create. The message was clear: a loan encompasses more than a single numerical figure. This broader perspective encourages informed decision-making, ensuring that borrowers understand the complete financial commitment before entering into agreements. It is important to note, however, that CREDICORP clarified its latest guidance is purely for informational purposes and does not constitute formal legal advice or official policy.

Lenders and their legal counsel in Nigeria must immediately review and update their debt recovery practices to ensure compliance with CREDICORP's warnings, avoiding tactics like harassment, public shaming, or contacting third parties, which could lead to legal exposure under the FCCPC lending framework and constitutional rights. Compliance officers should update internal policies and training to reflect these guidelines and mitigate risks.

Source: Original reporting via Punch Newspaper