FG Opposes Rights Infringement By Online Lending Companies

The Nigerian federal government has said it has opened investigations as part of its plans to penalize companies in the money lending industry that engage in illegal acts.

This is according to information contained in a document signed by the Director General of the Federal Competition and Consumer Protection Commission (FCCPC), Mr. Babatunde Irukera, on behalf of the Joint Regulatory and Enforcement Committee in Abuja. .

In the statement, the FCCPC, the Central Bank of Nigeria (CBN) and the Financial and Economic Crimes Commission (EFCC) announced that they have opened an investigation into money-lending activities for rights violations.

The committee also includes among its members the Independent Commission on Corrupt Practices (ICPC) and the National Information Technology Development Agency (NTDA).

A loan application

According to Irukera, the committee is spearheading efforts to regulate a number of potentially questionable practices by certain money lenders, also known as loan sharks.

The Federal Commission for Competition and Consumer Protection, on November 10, 2021, organized a meeting attended by the Director General of the Independent Commission for Corrupt Practices (ICPC) and representatives of the National Agency Information Technology Development (NITDA) and the Central Bank of Nigeria (CBN); by leading an effort to combat the multiple potentially dubious conduct of certain money lenders, otherwise known as usurers.

He also revealed that the agencies decided to work together, take immediate enforcement action against known offenders while investigating others and initiate criminal prosecution where appropriate.

Illegal activities of loan sharks

It is no longer news that many Nigerians have long complained bitterly about the illegal and heinous tactics employed by loan sharks. They include outright lies against defaulting consumers, invasion of their privacy and other violations of their rights.

Usurers have a habit of exploiting their clients’ personal information, compromising their privacy, and sharing it with those who were not involved in the original deal.

In addition, these loan application operators send embarrassing short message service (SMS) and WhatsApp messages to contacts close to defaulting debtors in an attempt to shame defaulters.

Business law expert Chinenye Ajayi, who spoke to Technext about it, said the act of accessing borrowers’ contact lists for the purpose of publicly humiliating them is illegal because borrowers don’t have not expressly consented to the invasion of their privacy for this. goal.

“Therefore, sending messages to the applicant’s contacts may be considered an invasion of privacy if the loan applicant does not expressly consent to the specific use of this information as it was used. Broadly worded clauses can arguably be viewed as a misrepresentation of the facts because they are not specific. As such, the loan applicant can initiate an action in violation of his right to privacy.

Chinenye Ajayi

Previous sanctions

According to the federal government, many money lending organizations in Nigeria operate illegally because they are not registered with the relevant authorities.

“Initial investigations show that many of the purported lenders are not legally established or otherwise authorized by the relevant authorities to engage in the services they ostensibly provide. “

FG

Regarding the issue of illegal practices, let us recall that the National Information Technology Development Agency (NITDA) recently fined Soko Loans 10 million naira for various offenses against its users, including breach of the law. privacy and erosion of trust.

According to one of the complainants, when he failed to meet his repayment obligations due to insufficient credit on his account on the date on which the direct debit was to take effect, the company unilaterally sent messages that undermined privacy to the complainant’s contacts.

NITDA spokesperson Hadiza Umar on sokoLoan

The NITDA spokesperson said investigations revealed contacts to whom the messages were sent were unaware of the loan as they were not a party to the transactions and also did not consent to the processing. of their data.

She also accused Soko Loans of integrating trackers that share customer data with third parties into her mobile app. These trackers were installed without user notice or approval and without going through the appropriate legal channels.

How can customers report cases?

Following the resolutions of the meeting, Mr. Irukera said the commission has created a dedicated email account to receive complaints, as well as the identity of companies or individuals participating in these practices.

According to him, the email address is [email protected]

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David A. Albanese