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January 17, 2022

How digital loan providers breach data privacy, violate rights of Nigerians

By Nigerian journalist Kunle Sanni, a participant in the Digital Identity, Data and Technology in Africa Workshop 2021 and digital identity reporting grants series. First published in Premium Times.

Nigeria's digital e-commerce platforms offering short-term loans have resorted to unprofessional conduct and illegal measures in recovering the loans.

In July, Piye Garuba needed N10,000 (US$ 24.38) for an important task. So when he saw 9Credit, an online platform, offering short-term loans, he grabbed the offer.

The 31-year-old Abuja-based lawyer was elated when the approval of his loan request arrived shortly after filling, on the application (app), the Know Your Customer (KYC) form with necessary details such as his Bank Verification Number (BVN).

Little did Mr Garuba know that it was the beginning of a relationship that would turn sour.

After repaying the initial N10,000 with an additional 20 per cent, being the interest for seven days, Mr Garba turned to 9credit for another loan. He repeated the cycle until the eleventh time when he defaulted.

“When I defaulted, that was sometime at the end of August, I began to receive multiple text messages from different sources saying they are Recovery Agents from 9Credit. The agents kept sending threatening messages to all my contact lists including my wife, colleagues, mother-in-law and uncles,” said Mr Garba.

“The harassment went further with several threats and curses. Also, using all manners of offensive adjectives like “Chronic and Unremorseful Debtor” some of the text messages stated that I had been declared ‘wanted.”

Mr Garuba said despite the insults and embarrassment to him and members of his family, he was not bitter because he understood that he had breached an agreement by not paying up when due.

“It was my fault because I defaulted and it was for a reason because I was going through a tough time. And not that I wasn’t going to pay, or that I had ulterior motives to run away with their money.”

The legal practitioner eventually sometime early in September made attempts to repay the loan on the app but was unsuccessful. He then decided to make a direct bank transfer to the money-lending platform’s bank account.

“I began to experience trouble with the app so I wasn’t able to pay up at the initial time. After trying several times without success, and whereas there was this particular agent who had been calling me for days to pay up, I asked the agent to provide me with the platform’s account number so I could do it manually,” he told PREMIUM TIMES.

‘’The agent provided an account number: 9157312076 with Polaris Bank and the Account Name MONNIFY 9Credit Loan Repayment. And I made a transfer of N13,700 on September 7.”

Checks by PREMIUM TIMES also validated Mr Garba’s claim as a bank app displayed the owner of the account number provided as ‘’MONNIFY LOAN REPAYMENT LTD’’.

Mr Garba said 24 hours after making the repayment, he noticed the money did not reflect on the 9Credit app. Thereafter, he began getting calls from their agents again, a development he said triggered concerns of fraud.

He said he got perturbed when the calls persisted and they claimed that he paid through the wrong agent, three days after making the payment.

“I was worried because if truly I paid to a wrong agent, how did the said agent get hold of my sensitive details, that includes my name, date I defaulted and the rest,’’ he explained.

‘’I insisted that I had paid up through an account number sent to me by their agent who had been calling that I pay back my debt. But despite my efforts, the messages persisted,” he said, noting that he filed a complaint to the company via the customer care channels and got no response.

Mr Garba later petitioned the National Information Technology Development Agency (NITDA) about the conduct of 9Credit, alleging cyber-bullying and harassment.

In the petition seen by PREMIUM TIMES, dated September 17, the lawyer demanded the sum of N50 million from 9credit for the “damages, defamatory, derogatory and malicious” messages sent to him.

He said the actions of 9credit ‘’Is a disrespect towards the laws guiding its operations in Nigeria, and as such have caused great injury to the character and person.’’

Despite his petition to NITDA, Mr Garuba said the action did not stop the continuous harassment by 9credit.

Inside online money-lending business in Nigeria

Nigeria’s digital e-commerce platforms and fintech companies have delved into provisions of short-term loans to help subscribers meet urgent needs, but they have in recent months resorted to unprofessional measures of harassment, cyberbullying and breach of data privacy of their customers who may have defaulted in loans repayment.

Since they do not require collateral and proper documentation as is the case in traditional banks, accessing loans with just a click makes them a preferred choice.

For instance, 9Credit can loan its customers between N3,000 and N100,000, which is expected to be repaid between 62 and 120 days. This depends on the credit score — a ranking based on the amount of personal and sensitive data the applicant has provided.

According to what is stated on the 9credit website, the interest rate is 0.07 per cent per day and is over 25 per cent per annum.

Other requirements include consent to access their customers’ contact lists and other sensitive data.

According to 9credit’s privacy policy, the platform seeks its customers to authorise the consent of ‘’Personally identifiable information” that include name, password, GPS location Information, civil status, SMS Logs, email address, telephone number, and other personal details.

‘’We collect certain data to be able to provide the Service to you. We also collect data for use in verifying your identity and creating credit scoring models to determine what Loans can be offered to you. We also use this data for purposes of collections (e.g. communicate with your phone-book contacts to finish collection when you are (have) failed to repay and credit reporting,’’ its consent policy reads in part.

These policies have been criticised by cyber security experts and lawyers who insisted that it is a breach of the Data Protection Act.

‘’For the data obtained from the data subject to be considered as lawful and valid, data processors and controllers are to ensure that they seek the consent of the data subject without coercion, undue influence and fraud,” Kenna Partners, a multi-service law firm in Nigeria, states in its 2021 analysis on ‘’Data Protection and Data Privacy in Nigeria.

‘’Additionally, the data obtained should be subjected to certain data rights of the data subject which include; right to rectification, right to information, right to erasure, etc.’’

Apparently, when a customer defaults, 9credit’s controversial policy provides the company with unrestricted access to close associates, relatives and friends to send threatening messages to.

Many of the victims who spoke to PREMIUM TIMES narrated instances of abuse and harassment by loan recovery agents.

They also alleged shady practices such as deliberately stopping repayment options on the apps three to five days after the due date. This, according to them, is to make the customers default in repayment and ultimately incur additional interest.

Sad tales abound, relationships, businesses shattered

Lagos-based Emamoke James was introduced to NairaPlus, another lending platform, in June, by her husband who used her details to obtain a short-term loan on the app.

On NairaPlus, there are juicy offers, including one that allows a six-month repayment period with an interest rate of 1.3 per cent monthly, but Mr James opted for a seven-day repayment plan when he requested a N13,500 loan.

However, Ms James, a 21-year-old businesswoman, said the barrage of life-threatening messages from NairaPlus agents after her husband defaulted on the repayment affected her marriage negatively.

As a result, she moved out of her matrimonial home and currently resides at her parent’s house.

According to her, the interest from the loan has since accrued and they are expected to repay a total sum of N70,000.

“On July 21, this year, my husband collected N13,500, the loan was to be refunded within seven days, that is July 27. For unforeseen reasons, we defaulted and ever since it has been a hell for me and my family.

“Now, the interest rates that have incurred on the debt is on the high side now, I think about N70,000 and that is not even the issue. But the life-threatening messages and insults are too much and I have been the one suffering it,” she narrated.

The recovery agents have been sending messages to her friends and customers, describing her with all sorts of horrible adjectives, she told our reporter.

“On October 6, they sent a message that if I do not want to bury my family this year, I should go pay up my debt, else I will be responsible for the cause of their death.

“I told my husband to pay because it is very embarrassing calling my pastors and friends that I am a criminal.

“And for me, as a business person, it has also affected my business, it has affected my reputation because I sell cosmetics online. And my details as a fraudster are all over cyberspace,” Ms James lamented.

Rejoice Adeoye, a 24-year-old event promoter, said the N18,700 loan she got from Lcredit nearly severed her relationship with her boyfriend.

Recounting her ordeal, Ms Adeoye, a student of Anthropology at the University of Ibadan, said she resorted to the loan on August 25 to settle her school acceptance fee and other pressing needs but ended up paying over N26,000 because of the mounting overdue charges including the Lcredit company policy fee charges.

‘’I got a loan of N18,700 from LCredit on August 25 and the due date was September 7, but I was credited N14, 773 and I later paid about N26, 000 because it was adding overdue charges, including the company policy on charges.

‘’The overdue charges are a lot compared to what they sent to you in the beginning,’’ she said. ‘’What it shows on the LCredit App is that they supposedly sent you N18,900 but they sent me N14,000, meaning that N3,927 is for ‘service charge’. Isn’t that too much?” Ms Adeoye queried.

‘’And as at due date, you are to pay N18,700 and if that loan becomes overdue you would have to pay extra charges – mine was many days overdue, that is why my debt increased to over N26,000 and I paid the loan running three jobs together with school runs.”

Ms Adeoye said the agent sent life-threatening messages to her current boyfriend and two of her former boyfriends whom she had not spoken to in years.

”It almost cost me my relationship but thank God I have a very understanding partner, so he handled the issues,” she told PREMIUM TIMES.

While she confirmed she currently has an outstanding debt with the lending company, Ms Adeoye said the terms and conditions of Lcredit only provided for two guarantors, noting that sending messages to all the contacts was a breach.

”Before I could pay up that money, the agents would be calling me morning and night that they were going to embarrass me. And they did it by sending messages to all my contacts; some of my contacts would be calling me getting angry at me that I used them as a guarantor. But I eventually wound up getting the money which was paid in parts.

“This is very sad, the government should do something about it.”

Apart from invading your privacy, NewCredit, another loan platform, is basically ruining people’s lives, says Nwakaego Osage, (not her real name) who had her picture and her son’s marked “wanted” and circulated on social media.

“In my case, they went as far as lifting my WhatsApp Display Photo (D.P) that had the picture of me and my son. And they edited it with the inscription ‘’Wanted’’ and began to circulate it on my due date.”

According to her, the money-lending platform had asked for emergency contact and she gave out the phone numbers of her husband and my sister.

“And the two were not called, but they (App loans) went ahead circulating a picture of me and my child to people that do not even know anything about my life.”

Mrs Osaje said she defaulted because the portal for repayment on the app was not going through.

“They have emails and phone numbers on their App; you call those numbers and send emails no one replies to you and I have evidence where I have tried calling and texting them for an alternative where I can pay. But they wait till your loan is like five or six days overdue and they now send a message expecting you to pay the outrageous overdue charges. That is criminal and stealing.”

‘’Because the day I wanted to pay, your App was not working and I couldn’t reach you. When it’s time to repay, you will have to chase them, until it is about five to seven days after then. They will send a message insulting you and especially when you are not paying the overdue charges that is when you now become a criminal.”


When contacted through separate phone calls on November 29, two customer care agents of Lcredit, who identified themselves simply as Alabi and Gift, confirmed that Ms Adeolu has made full payment of her loan of N18,700.

They also confirmed the details of the company’s service charge. But they neither denied nor admitted the threatening messages sent to her contact list which were not part of the emergency numbers she listed as guarantors.

“I don’t know about the harassment claims, because I am speaking to you from the customer care service, not from the recovery agents department. I do not know what principles guide that department. Although we are under the same company; we are from different departments and there is no synergy between us. It is not a collective job,” Mr Alabi said.

While reacting to the excesses of some of their recovery agents, he explained that Lcredit only reaches out to a few contacts of a customer who proved adamant not to repay a loan.

For her part, Ms Gift said Lcredit only reaches out to customers’ contacts when they have either changed their phone number or refused to pick phone calls put to them for repayment of their loans.

“We only call the contacts of our customers to help us notify them (customers) to pay up their debts,” Ms Gift said.

When a PREMIUM TIMES reporter visited Sokoloan’s office at No 9, Acme Road, Ikeja Lagos state, the company was no longer at the address.

The new location of the company was later tracked to 5, Ogunsiji Close, Allen Avenue, Ikeja, about two kilometres and a six-minute drive from the former address.

The company, which occupies the third floor of the storey building, also houses another credit company named “Beyond Credit”.

At the new address, a staff of SokoLoan, who declined to give his name, inquired as to how the address was known.

“If I may ask, how did you know the place? Because the address is not online, who gave you this address,” he asked repeatedly, explaining that the company refused to put up its address to avoid visits from customers who may want to harass the staff.

Meanwhile, the staff asked the reporter to send a formal notice to the company, indicating the reason for the visit and a response would be given.

SokoLoan responded with a blank message to our enquiries in a separate email earlier sent on November 29.

As of the time of filing this report, no formal response had been given by the company.

However, efforts made by PREMIUM TIMES to reach 9Credit, NairaPlus, NCash and NewCredit via phone calls, text messages, and emails for comments over the complaints of their customers were unsuccessful.

NairaPlus did not reply to our requests for comments. A recovery agent of the company named ”Princess Pretty” on Truecaller also did not respond to several calls and messages.

Similarly, when contacted on November 17, an agent of NCash who had been sending unsolicited messages to a customer named Fafiolu Ibironke for comments, declined to speak.

Also, emails sent by this reporter to 9credit for reaction did not get a response.

The address on their website: “Lawal Street, Oregun, Ikeja, Nigeria,” did not indicate a house number. When our reporters visited the area, about seven residents interviewed denied any knowledge of the firm.

NewCredit has no contact information stated on its website. A recovery agent named Eazy Buy on the Truecaller app did not respond to several calls and messages

Findings by PREMIUM TIMES show that many of the phone numbers of some of these online companies are flagged as ”SPAM” on the TrueCaller App. Many of the phone numbers are always switched off. All recovery agents contacted by this reporter declined to speak.

Joint Management

PREMIUM TIMES’ analysis of details of the controversial money-lending apps shows that some are managed by the same company.

For instance, findings on Newcredit and Palmcredit websites show the two loan services are both managed by Newedge Finance.

Although the company (Newedge finance) only mentioned Palmcredit as its singular loan product, results from the analysis conducted show Newcredit is also another of the company’s loan products.

Also, both Palmcredit and Newcredit use the same customer care contact number (017001000).

Similarly, checks on the policy statement on StarLoan revealed that the lending platform belongs to Soko Loan Lending Company Limited.

Soko Loan was in August fined N10 million for data privacy breaches by NITDA, following numerous complaints.

Hadiza Umar, Head, Corporate Affairs and External Relations of NITDA, said the action was taken following a series of complaints against the company for unauthorised disclosures, failure to protect customers’ personal data, defamation of character and violating the provisions of the Nigeria Data Protection Regulation (NDPR).

Account blocked

When contacted for confirmation, Olufemi Daniels, the Lead- Regulations Monitoring and Compliance at NITDA, said the agency has a legal lien over Soko Loan’s bank account from which it can recover the sum imposed on the company.

He also stressed that some conditions precedent to the receipt of payment by Soko Loan has not been fulfilled.

Mr Daniels said investigations by NITDA revealed that despite the fine, SokoLoan had not stopped its privacy-invading actions.

”The sanctions imposed on Soko Lending Company include financial and non-financial sanctions. Some conditions precedent to the receipt of payment have not been fulfilled,” Mr Daneils said in response to a PREMIUM TIMES enquiry.

”Moreover, our ongoing investigation reveals the company has not stopped its privacy-invading actions, hence we are taking other actions beyond administrative sanctions. Furthermore, we have a legal lien over a bank account of the company that can meet the sum imposed on them.

On other companies, he said NITDA had nine active investigations against lending companies.

“We are also collaborating with FCCPC, ICPC and the CBN to investigate complaints received by them on the same subject.”

Ignorance on Data Privacy

Experts who spoke to PREMIUM TIMES said these acts thrive because Nigerians are not aware of data privacy and they often click ‘Agree’ without going through the policies of these online platforms.

However, with efforts embarked on by the government to curtail the many excesses of these lending platforms from further breaches of Nigerian data privacy, experts say there is a need for the government to take more stringent steps on the matter.

According to a survey done by Loughborough University in the United Kingdom, titled ‘’Nigerians’ Perceptions of Personal Data Protection and Privacy’’, 41 per cent of Nigerian internet users do not bother reading the privacy statement on E-Commerce websites.

Furthermore, about 44 per cent of Nigerians never wondered about the use of their personal information when performing transactions online, most e-commerce websites.

Lekan Afolabi, a data privacy expert and Peter Okebukola, a Professor of Science and Computer Education at Lagos State University, shared a similar view.

“I will not blame them (victims). We are in an environment where nobody really cares about privacy,” Mr Afolabi stated.Mr Afolabi said it is wrong for the money lenders to collect a piece of third party information from an individual.

“A person who has in-depth knowledge of the consequences of data privacy means, would not just allow these companies to have access to his contacts and other sensitive information about him/herself.”

“Now for the company, you should not collect third party information from an individual. A loan company should not say that they have requested consent from a customer to share my data. And a loan company should not get my private information from their customer backing their action that they have requested my data without my consent; that is not consent. This is why a company like Soko Loans was fined by NITDA.”

Mr Afolabi proffered that government agencies such as the Ministry of Digital Economy and NITDA should ensure awareness programmes are carried out to educate Nigerians on data privacy and protection.

Mr Okebukola, who explained the vulnerability of Internet users to cyber attacks due to sophisticated technologies, provided tips on improving digital security.

“Ensure the security software on your phone or computer is updated; be suspicious of offers that are mouth-watering with a promise of harvests where you have not sown and do not sign up for such offers; be careful of checking boxes which requests for your contacts to be shared; as much as possible, avoid free wifi in public places; before you click the “Agree” button in any site you wish to patronise, ensure that you carefully read the usually lengthy, privacy policy and end-user-license-agreement. ”

He also encouraged Internet users to use strong passwords and frequently change the passwords and avoid using the same password across all your sites.

Also, Boye Adegoke of Paradigm Initiative Nigeria (PIN), in an interview with PREMIUM TIMES said: ”There is a low level of awareness of data privacy in Nigeria from researches we (PIN) have done in the past, it is clear that people do not pay attention to the laws and rights.”

On the excesses of many of the online money lending platforms, Mr Adegoke, who is the manager of Digital Rights Advocacy and intervention projects, described the acts by the lending agencies as sheer lawlessness.

”For me, the act is an exhibition of lawlessness. They (lending platforms) feel they have the right to call random people who are not involved in the transactions. It shows you the level of their understanding of data protection privacy and the problem is that both the people and the corporations are in the same situation.

”People call you randomly and say someone took a loan from us, that person has no right to call you,” he said, noting that by calling the third party the agent at the other end of the call ”is intruding into your privacy and your personal space, e.t.c.

”So those loan organisations are breaching the privacy rights of people, and I am aware that there is a court judgment regarding that already, but I think that the level of awareness is still very low among Nigerians. And this is also because the affected people rarely take it up with these loan companies.”

Mr Adegoke also said the culture and tradition of Nigerians as a people, however, play a huge role in the declining rate of awareness of the data privacy rights policy.

”And because of the kind of culture we have, when they (Recovery Agents) call saying that your wife or family member took out a loan and has refused to pay; people would decide to focus on the shame of being associated with a debtor.

”That is also the card that the loan companies are playing. Meanwhile, whatever transaction that ever existed between the loan company and the customer should not concern a third party that is not a guarantor of that person that took the loan,

”People are not doing the right thing and there is no strong framework around it to ensure that these companies are held accountable for the violation,” he added.

Sanctions, and joint operation

As the clamour for stringent measures against the excesses of online loan providers gets attention, NITDA has announced a partnership with the Federal Competition and Consumer Protection Commission (FCCPC) to tackle the menace.

This came days after a lawmaker, Akin Alabi, raised a motion on the floor of the House of Representatives on the need to check the excesses of money lenders.

According to NITDA spokesperson, Hadiza Umar, the constitution empowers the FCCPC to administer and enforce provisions of every Nigerian law with respect to competition and protection of consumers.

“NITDA has therefore found the FCCPC as a key stakeholder in its efforts to rein in the activities of some micro-money lenders who have formed a penchant for abuse of personal data of Nigerians. These operators execute this by abusing their personal data, breaching their privacy and sharing it with others who are not part of the initial contract.”

She also announced that the agency has received over 40 petitions from members of the public on the personal data abuse of some lending companies.

The partnership with FCCPC will lead to a more robust and concerted regulatory approach which we believe would ensure that Nigerians get the necessary reprieve from the illegal use of their personal data for money lending operations, she said. The partnership would entail joint investigations, enforcement and possible prosecution, she assured.

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