₦1.86b Excess Charges: CPC Probes FCMB over Allegation

The Consumer Protection Council (CPC) has summoned the management of First City Monument Bank Plc (FCMB) for an investigation into an allegation by the Bauchi State Government, accusing the lender of charging ₦1.86 billion excess interest on its account.

The CPC in a statement recently said the Bauchi State  Government sent the petition to the Council after the Central Bank of Nigeria (CBN) declined further adjudication on the case through a letter dated July 15, 2015 to the petitioner, asking it to “seek alternative means of redress as the case is hereby deemed closed.”

The statement, signed by the Head, Media, CPC, Abiodun Obimuyiwa, stated that the CPC waded into the lingering disagreement between the bank and its consumer with a letter, dated August 20, 2015, requesting the lender to respond to the allegations contained in the complaint within seven days.

The Council said, as at the time of issuing a statement on the allegation, the bank had not responded to the letter. The statement reads: “The state government had alleged that the bank, without any prior information, charged 21 per cent interest rate per annum on two loans of ₦10 billion and ₦3billion, which the bank granted it on 22nd January 2009 and 15th June 2011 respectively both at the rate of 13 per cent interest per annum, and that this has resulted in excess interest charges on its account, amounting to the sum of ₦1,864,188,594.78 as at February 2014.

“The Council’s letter also stated that the state government further alleged that a review of its account with the bank showed inconsistencies in the application of interest rate with the rate going up as high as 54.46 per cent in some cases.” The CPC stated, in its letter to FCMB, “These allegations are very weighty because they suggest unscrupulous exploitation of the customer contrary to the Consumer Protection Council Act Cap. C25 Laws of the Federation 2004 and other enactments for the protection of consumers.”

Meanwhile, in a notice of investigation, dated September 3, 2015, the Council had required officers or representatives of the bank “with sufficient knowledge of the facts surrounding the alleged violations to attend and testify before the Council on the 17th of September 2015.”

According to the CPC, the bank’s representatives “are required to bring along print-out of the customer’s statement of account, loan agreement and/or any relevant documents, invoices, contracts, agreements, records or information that will assist in responding to the aforementioned concerns.”