FG Finally Begins Probe of Sokoloan, LCredit, Other Loan Shark Apps Over Breach of Customers’ Data Privacy

The Federal Government has begun a probe of online banks over their alleged breaches of customers’ data privacy, it has been learnt.

The Director-General, National Information Technology Development Agency, Kashifu Inuwa, who made this disclosure in Abuja on Monday, said the agency was working with the Nigeria Police Force and other relevant agencies to investigate several lending platforms, popularly called loan shark platforms.

He said this while addressing journalists ahead of the National Privacy Week 2022.

“We are working with relevant agencies to make sure we address that challenge because it is not only NITDA’s mandate that governs everything. When you talk about any financial services, it is the CBN. When you talk about general complaints, there is a commission for that. But NITDA plays a critical role because of the breach of data privacy.

“We have sanctioned some of them. We are working with the Nigerian police, investigating many of them. We are working to address the challenge,” Inuwa said.

Amidst outcry of data invasion by Nigerians against lending platforms, NITDA had imposed a fine of N10m on Soko Loan for data breach last August.

Findings revealed that a number of these loan app operators now send embarrassing short messages service (SMS) and WhatsApp messages to the close contacts of their loan defaulters with the intention of shaming the defaulters, tagging them with terms like ‘criminal,’ ‘fraudster,’ and ‘terrible debtor’ among others.

In some cases, the full names, phone numbers and pictures of the alleged loan defaulters are shared with their contacts like religious leaders, members of churches and mosques, close friends, bosses, colleagues and family members.

In November 2021, NITDA partnered with the Federal Competition and Consumer Protection Commission to address the increasing rates of data privacy abuse by money lending organisations, particularly fintech firms.