The Consumer Protection Council (CPC) has ordered First City Monument Bank (FCMB) to refund the sum of N1, 542,775,841.58 to the Bauchi State Government (BASG) at the prevailing interest rate.
The order was made after the conclusion of an investigation into a petition by the state government, according to the council in a statement issued on Sunday
The Council’s Director-General, Mrs. Dupe Atoki, yesterday stated that the order was in line with its functions to provide redress for unscrupulous exploitation of consumers by companies, firms, trade associations or individuals, under Section 2 (i) of the Consumer Protection Council Act, Cap. C25 of the laws of the Federation of Nigeria, 2004.
Atoki assured that the Council will continue to fight for the rights of aggrieved consumers in any sector of the country’s economy.
The loans, according to the state government, were given at 13 per cent floating interest rate, while the FCMB said the interest was increased to 21 per cent.
“FCMB, which was then known as First Inland Bank Limited, granted BASG two-term loans of N10 billion and N3 billion in 2009 and 2011 respectively at 13 per cent floating interest rate as claimed by the state government, while FCMB said it was increased to 21 per cent, raising dispute as to whether or not the increase in interest rate was duly communicated to BASG,” the council said.
The CPC ordered the bank to report compliance within 30 days of receiving its directive.
The statement read in part, “Having reviewed the various responses, documents and presentations made by the parties at the investigative hearings, the council disclosed that it found out that the increase in the interest rate was not duly communicated to the Bauchi State Government and that the interest rates applied across board by the FCMB were excessive and arbitrary with some charges as high as over 50 per cent
“The council also found that apart from the arbitrary and excessive interest charges, the substantial part of the unlawful deductions was made from the principal loan repayment.
“Also identified as part of the illegal deductions by the CPC’s investigation was the excess processing fees and even management fee, which was not provided for in the offer letters.
“The council, therefore, ordered the FCMB to refund to the Bauchi State Government all excess interest charges and unlawful deductions in the total of N1,542,775,841.58 and at the prevailing interest rate.”