FCCPC Introduces DEON Regulations to Curb Abuses in Nigeria’s Digital Lending Sector

The Federal Competition and Consumer Protection Commission (FCCPC) has announced a sweeping regulatory framework to tackle harassment, data breaches, and exploitative practices in Nigeria’s fast-growing digital lending space.

In a statement issued on Wednesday, the FCCPC confirmed that the new rules, titled the Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (DEON regulations), officially took effect on July 21 after being gazetted. The regulations, made pursuant to the Federal Competition and Consumer Protection Act of 2018, are expected to reshape Nigeria’s digital lending ecosystem by prioritising consumer rights, ethical recovery practices, and responsible lending.

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Ending Years of Abuse in Digital Lending

For several years, Nigerians have raised complaints against unregulated digital money lenders who were notorious for deploying aggressive recovery tactics, including harassment, defamation, and breach of privacy. These practices often left borrowers vulnerable, with their personal data shared indiscriminately and reputations damaged through unethical loan collection campaigns.

Speaking in Abuja, Tunji Bello, Executive Vice-Chairman and Chief Executive Officer (CEO) of the FCCPC, said the DEON regime is designed to put an end to these abuses.

“For too long, Nigerians have endured harassment, data breaches, and unethical practices by unregulated digital lenders,” Bello said. “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. No consumer should be harassed, defamed, or lured into unsustainable debt under the guise of digital lending.”

The FCCPC noted that while digital lending has expanded access to credit, particularly for underserved Nigerians, unchecked practices have undermined trust in the system. The DEON regulations aim to balance innovation with accountability, ensuring consumer protection is not sacrificed for growth.

Key Features of the DEON Regulations

The new framework introduces several groundbreaking provisions to ensure transparency, fairness, and accountability across the lending ecosystem. Among the highlights are:

• Ban on pre-authorised or automatic lending: Lenders can no longer debit accounts or extend loans without express and informed consent from consumers.
• Mandatory transparency in loan terms: Digital lenders must provide clear, accessible, and comprehensible loan agreements, outlining interest rates, repayment schedules, and penalties without hidden clauses.
• Ethical marketing standards: The regulations prohibit misleading advertisements and exploitative promotions that lure consumers into unsustainable debt.
• Mandatory joint registration for partnerships: Partnerships in digital lending must register jointly with the FCCPC to ensure accountability.
• Local ownership in airtime and data lending: At least one locally owned service provider must be involved in the provision of airtime and data loans.
• Restrictions on monopoly agreements: Exclusive arrangements that create market dominance are now banned unless prior approval is obtained from the FCCPC.

The commission emphasised that these measures are necessary to level the playing field and ensure fair competition while safeguarding consumer dignity.

Compliance Requirements and Sanctions

Under the DEON regulations, all digital money lenders (DMLs), mobile money operators (MMOs), and related partners are required to register with the FCCPC within 90 days from the commencement of the regulations. Registration will only be approved upon proof of compliance with consumer protection laws, data privacy standards, and transparency benchmarks.

Failure to comply carries significant consequences. Non-compliant operators risk sanctions, including:

• Fines of up to N100 million or 1% of annual turnover
• Disqualification of directors for up to five years
• Revocation of licenses and prohibition from operating within Nigeria’s lending ecosystem

The FCCPC stated that these penalties are designed to serve as a deterrent, ensuring that only responsible and compliant operators remain in the industry.

Empowering Consumers and Promoting Accountability

The FCCPC also launched an initiative to empower consumers by providing avenues to report violations. Borrowers are encouraged to report unregistered lenders, exploitative interest rates, or breaches of data privacy through the commission’s complaint portal: lenderstaskforce@fccpc.gov.ng.

The agency noted that consumer feedback will remain vital to monitoring the sector, identifying bad actors, and holding defaulters accountable. “Our framework prioritises the protection of Nigerians while fostering a healthy credit market that enables financial inclusion,” the statement read.

By instituting a centralised complaints mechanism, the FCCPC hopes to bridge the gap between consumers and regulators, giving borrowers a stronger voice in shaping lending practices.

Implications for Nigeria’s Lending Landscape

Analysts believe the DEON regulations mark a turning point in Nigeria’s financial technology sector. With digital lending experiencing rapid growth, the absence of strong regulatory oversight had created room for widespread abuse. By enforcing registration, transparency, and ethical conduct, the FCCPC is attempting to restore consumer confidence while encouraging responsible innovation.

The inclusion of provisions on data protection is especially significant, given the numerous complaints of lenders accessing borrowers’ contacts and sending defamatory messages to friends and family. By outlawing such practices, the commission has drawn a hard line between legitimate recovery methods and unlawful harassment.

At the same time, the emphasis on local participation in airtime and data lending may strengthen domestic players and reduce foreign dominance in the sector.

The introduction of the DEON consumer lending regulations by the Federal Competition and Consumer Protection Commission represents a landmark reform for Nigeria’s digital financial sector. By directly addressing harassment, unethical recovery tactics, and privacy violations, the rules promise to reshape the landscape of consumer credit in the country.

While digital lending remains an important tool for financial inclusion, the FCCPC has made it clear that growth cannot come at the expense of consumer rights and dignity. With mandatory registration, strict sanctions, and a strong focus on transparency, the DEON regulations lay the foundation for a more ethical, fair, and resilient credit ecosystem.

The challenge now lies in effective enforcement and ensuring that consumers, regulators, and lenders work together to create a financial system that truly benefits all Nigerians.