Executive Summary
Nigeria’s financial ecosystem, encompassing banks, fintechs, and digital lenders, have grown rapidly with increased digital adoption, but this growth has been accompanied by rising consumer protection concerns. Despite the FCCPC’s introduction of the 2025 DEON Regulations to curb harassment, data misuse, and other unethical practices, enforcement challenges persist.
Between March and August 2025, the FCCPC resolved over 9,000 complaints and recovered more than ₦10 billion, with the banking and fintech sectors recording the highest numbers. Fraud incidents also surged, with the CBN reporting a forty-five (45%) increase, and digital platforms were responsible for 70% of the ₦11 billion in losses. Although regulators have strengthened security measures, issues such as insider fraud, infrastructure failures, and aggressive debt recovery continue to undermine public trust.
This report reviews the regulatory framework, complaint patterns, and trust indicators, and recommends measures to strengthen consumer protection and resilience across Nigeria’s financial sector.
Introduction
The Nigerian financial ecosystem stands at a critical juncture. While financial inclusion has expanded, digital financial services continue to proliferate. However, the system faces significant consumer protection challenges that threaten the very foundation of trust upon which sustainable financial deepening depends. Between March and August 2025, Nigerian banks and fintech companies accounted for 4,615 complaints, representing the highest volume of consumer grievances across all sectors of the economy. This unprecedented concentration of complaints in the financial sector signals fundamental issues in how institutions interact with consumers, handle complaints, and maintain service standards.
The Regulatory Architecture of the Nigerian Financial Sector
Nigeria’s consumer protection framework in the financial sector is built on several laws and regulators, creating a comprehensive yet complex system. The FCCPA 2018 established the FCCPC and the Competition and Consumer Protection Tribunal, forming the foundation for consumer protection across all sectors. In financial services, the Central Bank of Nigeria (CBN) exercises primary oversight, supported by key legislation such as BOFIA 2020, which modernised banking regulation.
The system features multiple regulators with overlapping mandates. While the FCCPC serves as the apex consumer protection authority, the CBN retains sector-specific powers. The FCCPA enables concurrent jurisdiction , allowing both bodies to handle consumer issues. This dual structure gives consumers more avenues for redress but also creates potential confusion and regulatory overlap, sometimes leading to uncertainty about which regulator has ultimate authority.
Complaint Handling Mechanisms and Statistics
Recent data reveals the magnitude of consumer protection failures in Nigeria’s financial sector. Between March and August 2025, banking topped the list with 3,173 complaints, followed by Fast Moving Consumer Goods (FMCG) with 1,543, fintech with 1,442, and electricity with 458 . The dominance of banking and fintech complaints is particularly concerning given the central role these sectors play in Nigeria’s economic development and financial inclusion agenda.
The FCCPC’s intervention during this period resulted in financial recoveries exceeding N10 billion for consumers who had suffered losses, demonstrating both the scale of consumer harm and the effectiveness of regulatory intervention when consumers successfully navigate the complaints process.
Analysis of complaint patterns reveals several recurring issues that plague Nigeria’s financial ecosystem:
1. Network Failures and Service Disruptions
Digital financial services in Nigeria are heavily dependent on telecommunications infrastructure, and network quality issues represent the single most common complaint. Network quality was the most common issue, with many consumers reporting unexpected fees, exposure to scams, missing money from accounts, and agent overcharging. These failures have real economic consequences for consumers, particularly small business owners and market vendors who depend on reliable payment systems.
2. Unauthorized Deductions and Unexpected Charges
This is another pandemic that bedevils the finance sector. The persistence of this problem reflects fundamental failures in internal controls and customer communication. Research indicates that only around half of consumers recall the fee charged for their most recent mobile money or mobile banking transaction, and among those who believe they know the fee, only one-third are able to state the fee accurately.
3. Fraud and Security Breaches
Financial institutions in Nigeria suffered losses amounting to N52.26 billion due to fraud in 2024, marking a sharp increase of N34.59 billion compared to the N17.67 billion recorded in 2023 . More concerning, fifty-eight (58%) percent of digital financial services users had received a phone call or text message that asked them to share a password, requested money, or offered a fraudulent service .
4. Digital Lending Abuses
The digital lending sector has emerged as a particularly problematic area. Research reveals that thirty-seven (37) percent of digital credit users had ever been unable to pay back one of their loans, and 60 percent of respondents who have taken a digital credit report making some type of sacrifice to repay it.
Beyond repayment challenges, digital lenders engage in practices that violate basic consumer rights. Complaints received from consumers concerning the activities of identified money lenders included: questionable repayment enforcement practices such as public shaming and violations of privacy; use of exploitative interest rates and loan balance calculations; and failure of consumer feedback mechanisms.
Trust in the Financial Ecosystem
Trust is the currency of finance, and Nigeria’s financial ecosystem shows signs of trust erosion across multiple dimensions. Erosion in the level of trust is attributable to many factors, including resolution delay and failures, complexity in the reporting process, and data privacy violations, especially by digital lenders, amongst others.
Trust erosion or reduction has far-reaching effects on the economy. When consumers don’t trust financial institutions, they avoid formal financial services, undermining Nigeria’s financial inclusion objectives. When complaints are not resolved successfully, consumers are more likely to reduce or even stop using the problematic service altogether.
Trust in Nigeria’s financial system is even more affected by multiple barriers that prevent consumers from effectively seeking redress when problems arise. The first of these is awareness and knowledge gaps. Many consumers simply don’t know how to file complaints or which channels to use.
An even more prevalent barrier is the cost of seeking redress. Sometimes, the cost of seeking redress, especially where serious financial recovery is concerned, exceeds the value in dispute. Therefore, Complainants abandon their claim altogether because of the financial and time value required to pursue their claims.
Emerging Trends and Recommend actions.
The need to integrate stronger complaint systems, build trust, and reinforce our consumer protection frameworks is even more imperative in the wake of policy and technological developments being contemplated in the finance sector.
1. Open Banking and Data Portability
The CBN has commenced implementing an open banking framework expected to facilitate greater competition and innovation within the financial services industry by allowing third-party providers access to bank data. While this promises benefits, it also creates new consumer protection challenges around data security, privacy, and liability allocation. Therefore, stronger security frameworks, a prompt complaints-handling system, and consumer protection requirements cannot be overemphasised.
2. Artificial Intelligence and Algorithmic Decision-Making
Financial institutions increasingly rely on AI and machine learning for credit decisions, fraud detection, and customer service. These systems can perpetuate biases, lack transparency, and make errors that are difficult for consumers to challenge. Therefore, there is a need for a real-time complaint mechanism whenever Consumers identify these AI lapses, and the relevant financial institutions must integrate quick response teams to address these issues.
3. Cryptocurrency and Digital Assets
The Investment and Security Act 2025 has identified virtual and digital assets as securities in Nigeria. By their nature, digital assets are susceptible to fraud. Hence, there is a need for more sophisticated protection and complaint frameworks to address suspicion and reports of fraud involving digital assets before they are dissipated and rendered untraceable.
Conclusion
The way forward requires coordinated action from regulators, financial institutions, technology providers, and civil society. Regulators must enhance enforcement capacity, harmonise overlapping mandates, and leverage technology for better supervision. Financial institutions must move beyond minimal compliance to embrace consumer protection as a core business value. Most importantly, consumers must be empowered through education, accessible redress mechanisms, and transparent information to make informed decisions and assert their rights.
The stakes could not be higher. Nigeria’s ambition to achieve a $1 trillion economy by 2030 depends on a resilient, inclusive, and trustworthy financial system. Consumer protection is not ancillary to this vision; rather, it is foundational. Only by addressing the crisis and rebuilding trust can Nigeria’s financial ecosystem achieve its full potential and serve all Nigerians equitably and effectively.
Noble Obasi is a Team Lead in the Finance Sector at Stren & Blan Partners, while Michael Afuye and Ebenezer Ogunwole are Associates in the same sector.
Stren & Blan Partners is a full-service commercial Law Firm that provides legal services to diverse local and international Clientele. The Business Counsel is a weekly column by Stren & Blan Partners that provides thought leadership insight on business and legal matters.
Connect with Stren & Blan Partners:
Website: www.strenandblan.com
LinkedIn: linkedin.com/company/strenandblan
Twitter: twitter.com/Strenandblan
Instagram: instagram.com/strenandblan
