Federal Government Moves To Probe Rights Violation By Loan Sharks

The Federal Government of Nigeria has announced plans to investigate violations of human rights that have plagued the money lending industry otherwise known as loan sharks. This move is part of its plans to penalize companies that have engaged in illegal acts while restoring law and order to the industry.

According to a statement signed by the Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), Mr. Babatunde Irukera, the Joint Regulatory Committee which consists of the Federal Competition and Consumer Protection Commission (FCCPC), the Central Bank of Nigeria (CBN) and the Economic Financial Crimes Commission (EFCC) have all teamed up to take actions against activities of human rights violation. The investigation has commenced into the lending business that has continued to use stern measures to victimize and pressures loan takers. Sitting on the committee as members as well as the Independent Corrupt Practices Commission (ICPC) and the National Information Technology Development Agency (NITDA).

A number of Nigerians have expressed bitterness about some of the illegal and heinous tactics loan sharks continue to employ in a bid to get back their loans from defaulting customers. Some of these practices include telling outright lies against their defaulting consumers, severe invasion of their privacy, and other rights violation that has been termed “arbitrary unjust, and unreasonable.” Loan sharks in Nigeria have a history of adversely exploiting their customers’ personal information, compromising their privacy, and sharing details of their loan schedules with those who were not part of the original agreement.  These loan app operators have developed an appetite for sending embarrassing short messaging services (SMS) and WhatsApp messages to close contacts of loan defaulters’ with the aim of shaming the defaulters and driving them to pay back their loans. This unhealthy practice has pushed defaulting Nigerians to go to any length to repay these loans.

Mr. Irukera explained that a large number of these loan firms are not legally established. He narrates the lack of licenses by the appropriate authorities to engage in the services they provide.  Mr. Irukera says that “Initial inquiries demonstrate that many of the purported lenders are not legally acceptably established or otherwise licensed by the appropriate authorities to engage in the services they ostensibly provide.” Many Nigerians have fallen victims to these unregistered loan companies that operate solely online without physical infrastructures. These companies have taken to exploit Nigeria’s economic downturn by targeting the vulnerable, giving them loans with unfair, unreasonable, and ridiculous interest rates while also violating their privacies and spreading demeaning information in the case of a default.

The NITDA spokesperson, Hadiza Umar narrates a recent case which reveals illegal measures some of these loan sharks result to get their money back. Recently Soko Loan was fined to the tune of N10 million for invasion of privacy and the erosion of trust. After the borrower had defaulted with repayment obligations due to insufficient funds on the date the direct debit was to take effect, the company resulted into sending privacy-invading messages to the complainant’s contacts. Investigations revealed that the contacts to whom the messages were sent didn’t know about the loan as they were not parties to the transactions and neither did the complainant consent to the processing of his data. Soko Loans was accused of embedding trackers which share customers’ data with third parties in its mobile app. These trackers were installed without the notice or consent of the users and without going through the appropriate legal channels.

A business law expert, Chinenye Ajayi, who shared opinions have condemned the act of accessing borrowers’ contact lists with the goal of publicly shaming them. Ajayi says this practice is unlawful as the borrowers didn’t expressly consent to the invasion of their privacy for that purpose.

According to Mr. Irukera, the commission will now receive these complaints and information on the identities of businesses or individuals participating in these acts through its dedicated email: lenderstaskforce@fccpc.gov.ng. Nigerians are hereby advised to report suspicious practices by loan sharks within the country.