Digital lending apps disregard Google, Nigeria’s laws, continue to blackmail borrowers

The ability of securing loans within minutes just after a few clicks in digital lending apps, and particularly without collateral made loan apps a darling of many people. What the borrowers did not know, however, was that the hundreds or thousands of contacts (as the case may be) on their mobile phones, was the ultimate collateral. The numbers stored on their phones and accessed by the loan apps, were the lenders’ insurance against any inability to repay. In essence, their reputation and dignity or whatever was to be left of it was to be used in guaranteeing repayment of loans from N5,000 to N100,000 ( $12 to $240).

Digital lending apps disregard Google
Digital lending apps disregard Google

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It could be a business partner, customer, or even love interest and hundreds of other people a person would not want to get humiliated in their presence, but this, was the ultimate card the loan apps counted on to get paid.

“It is not a good experience,” said Jane, who defaulted on a loan. After the lender reached out to her phone contacts, to console herself, she said in a mixture of Pidgin and English; “Who no dey borrow? Even Nigeria dey borrow, it is a normal thing. But they should have focused on me paying their money and not reaching out to my contacts.” While she may have been humiliated beyond her imaginations, the psychological impact was a feeling of nothing else to lose.

Digital Lending Apps disregard Google, Nigeria’s laws, continue to blackmail borrowers

“Shame! Shame! Shame!” as may be recalled by Game of Thrones fans, was the chant as Cersei, the Queen Mother, was paraded through the fictional town of King’s Landing, as atonement for her ‘sins’. The same can be replayed, when hundreds or thousands of numbers on a person’s phone are contacted, all in a bid to shame a borrower into loan repayment.

Digital lending apps disregard Google
Digital lending apps disregard Google. Some of the loan apps in Nigeria banned by the government

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“Christmas is over, if you know you borrowed money from any digital lending App, biko (i.e. please) go and pay back. I don’t want to receive unnecessary messages because of you. Walahi, I go carry them come your house,” wrote Collins Nnabuife on his Facebook page, intended as a joke but also a portrayal of the current reality many live through. Not only for those who have borrowed, but their phone contacts who are harassed with threatening messages, even when they were never used as guarantors for the loan.

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The post by Collins was not unconnected to messages he had received, including one about a female acquaintance, which among other things read; “This is to inform the general public that Miss Jane Doe (real name withheld) with phone number: 00000000 is a thief and dubious criminal currently on the run with companys (sic) money. She has been declining and avoiding company calls to pay back.

“Kindly notify her on getting this notice, as pictures of her will be posted on social media platforms today for criminal act and BVN number blacklisted on failure to pay back today. We will submit her relevant details publicly and treat as fraud.”

Some Digital Lending Apps Blackmailing and Threatening Customers

Some of the digital lending apps that have been reported to indulge in similar acts include; 9Credit, NairaPlus, Lcredit, NewCredit, ncash, Kash Kash, iCoin, xCredit, Mint, and Soko Loan, which was recently fined N10 million following petitions by aggrieved users.

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While the apps mostly claim the lowest loan tenor is 91 days, in order to ‘pass’ Google playstore requirement for the apps to be hosted, all as recounted by ‘victims’, actually offer loans from seven days.

“We do not allow apps that promote personal loans which require repayment in full in 60 days or less from the date the loan is issued,” states Google on a web page on conditions for Financial Services apps. “We don’t allow apps that expose users to deceptive or harmful financial products and services,” it also says.

Christmas is over, if you know you borrowed money from any loan App, biko (i.e. please) go and pay back. I don’t want to receive unnecessary messages because of you

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Digital lending apps are required to indicate minimum and maximum period of repayment, maximum annual percentage rate, and other information, which most either misrepresent or omit. In particular, by offering loans of just seven days, for instance, these providers clearly flout a major criterion by Google that no tenor should be less than 60 days.

“I was broke then and under pressure to settle certain things,” said Chidi, who borrowed N10,000 each from three of such apps in mid-2021, a total of N30,000 ($72) but defaulted after the 2-week tenor. This led to a tsunami of messages and calls, first to threaten him to repay, then to all his phone contacts. He identified iCoin as one of the apps but couldn’t recollect the others when interviewed.

The amount a person is eligible to borrow is determined by the work they do and income. Also, when a person borrows and pays back, it qualifies them for another (higher) loan.

This was the strategy employed by Jane (mentioned earlier), who borrowed an initial N10,000, and repaid so she could be eligible for a higher amount of N20,000, on which she later defaulted. She told BusinessDay there was a sick relative in her care and there was no other person to provide money urgently needed the day she took the first loan. Someone she asked for help had recommended as app she called ‘Mint’.

To prevent defaulting on the payment after the one-week tenor, she borrowed from another person, used their money to pay the loan app, which qualified her for another loan. She would then take the second loan, this time N20,000 out of which she repaid the person.

The second loan was the source of her humiliation, but, curiously, after she had been thoroughly embarrassed, she now appears indifferent.

“I’m not worried anymore. After all, they already did their worst by sending out messages to all my contacts,” Jane said. “As they sent out messages to my contacts, I told them as punishment, I will not repay till after the Christmas and New Year festivities.”

A Google spokesperson, when asked for the company’s reaction to conducts of loan apps hosted on playstore, told BusinessDay the company has very strict policies that guide apps that are allowed on the Playstore platform. “When we find violations, we take very strong actions, including sometimes taking down the app from our platform. Violations can be reported by clicking the ‘Flag as inappropriate’ link under the menu on the Google Play store. When reports are received, We investigate, and take clear actions,” Google said.

Apart from violating the terms by Google playstore, the digital lending apps have also been alleged to contravene Nigeria’s data privacy law on one hand, and cyber security law on the other.

When Soko loan, one of the loan apps was fined N10 million by NITDA, it was hinged on complaints by users who accused it of breaching their privacy and defaming them by reaching out to their phone contacts.

“This action was taken after receiving series of complaints against the company for unauthorised disclosures, failure to protect customers’ personal data and defamation of character as well as carrying out the necessary due diligence as enshrined in the Nigeria Data Protection Regulation,” NITDA said in August, 2021. Months later, the action taken against Soko loan has not deterred other loan apps from similar practices.

However, an August 2021 publication on the legality of the fine imposed by NITDA on Soko loans, by Aluko & Oyebode, a law firm, suggested the decision may be flawed, citing some other cases. But the question remains, what can be done and who will rein in the excesses of the loan providers many now refer to as unethical loan sharks.

“As for the ‘loan defaulters’, whether their right to privacy has been breached depends on the terms and conditions they agreed upon before the loan or facility was given out. If you agreed for the lender to have access to your contacts in the event of default, I see no reason why you should complain,” was the view of Olaitan Akinnubi, a Lagos-based lawyer.

He however said, “Where I think the lenders go too far, is sending unsolicited messages to ‘innocent’ contacts who they have no business or relationship with. This, in my opinion is an invasion of privacy.”

An example of such messages sent to Akinnubi by Xcredit, read; A chronic thief and fraudster, ………, of …………… street, Lagos, (phone number), used you as an emergency contact and has absconded with the company’s money. Inform him to pay back now else he would be arrested and you would be implicated and sanctioned.

“Associating me with an alleged ‘chronic thief and fraudster’ and also threatening to ‘implicate and sanction’ me constitutes an harassment or what you can say is cyber bullying,” according to him.

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He further explained that section 24 (1) (b) of the Cybercrimes Act 2015 provides thus: “Any person who knowingly or intentionally sends a message or other matter by means of computer systems or network that he knows to be false, for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred, ill will or needless anxiety to another or causes such a message to be sent: commits an offence under this Act and shall be liable on conviction to a fine of not more than N7,000,000.00 or imprisonment for a term of not more than 3 years or to both such fine and imprisonment.”

Recently an LCredit customer who lives and works in Lagos, Foluke Abosede Tijani (not real names) has lamented that the now known notorious digital loan app should stop blackmailing borrowers.

According to Foluke who just sent her message to QUICK LOAN ARENA says he received a blackmail and threat message from the digital loan app today about a loan that has just fallen due within 24 hours.

The customer who has just lost her job is lamenting the threat from LCredit digital lending platform and calling on Nigerian government to prevail on quick loan apps and platforms to be ethical and stop blackmailing borrowers, urging them to play according to the rule and be fair to their customers who are going through hard and harsh times.

She isn’t denying the loan but said it just fell due and she just lost her job and need a few days to redeem it.

LCREDIT, google restores, play store
This borrower is crying to the govt to prevail on Loan apps like LCredit and others to stop blackmailing customers

Read the message from LCredit loan app below:

Good Day AXXXX FXXX, This is L CREDIT.

You have BREACHED OUR AGREEMENT? You have 1 hour to pay your PRINCIPAL AMOUNT or PAY A REASONABLE PART PAYMENT but failure to do so, THE COMPANY WILL;

1. BE CALLING AND SENDING THIS MESSAGE BELOW TO ALL OVER SOCIAL MEDIA AND TO ALL YOUR CONTACTS WITH YOUR PICTURE ATTACHED TO IT.

(This is to inform the General Public that a Serial Loan Defaulter who is Foluke Abosede Tijani with phone number 08035579133 has vowed never to pay “L CREDIT” their money and he’s wanted. Please distance from him because he’s not to be trusted in anything business/Money.

If found, please kindly Call/WhatsApp this number 08068493746 or Report to the nearest POLICE STATION).

2. SEND YOUR BVN TO CREDIT BUREAU FOR BLOCKING, BLACKLISTING, PUTTING AUTO DEBIT ON YOUR BVN AND MARKING IT CRIMINAL RECORD. MEANING YOU WON’T BE USING BANK AGAIN IN NIGERIA

3. SEND YOUR DETAILS/BVN TO EMBASSY. THEY WILL KEEP DENYING YOU, YOUR KIDS (BORN/UNBORN) VISA TO TRAVEL OUTSIDE NIGERIA BECAUSE OF THE CRIMINAL RECORD IN YOUR BVN AND FOR GOING AGAINST THE LOAN POLICY OF CREDIT BUREAU (CB).

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TO AVOID THOSE EMBARRASSMENTS, PLEASE PAY YOUR PRINCIPAL NOW OR PAY A REASONABLE PART PAYMENT IMMEDIATELY THROUGH YOUR APP OR TO THE ACCOUNT DETAILS BELOW…

Recently, it was announced that a joint committee comprising the Federal Competition and Consumer Protection Commission (FCCPC), National Information Technology Development Agency (NITDA) and the National Human Rights Commission (NHRC), will be working to tackle violation of consumer rights in the money lending industry, with a view to shutting down illegal businesses.

It is yet to be seen how this committee will ensure loan apps continue operating, without abusing the privacy of users. More so, if violated users will take steps to seek redress, at the very least, reporting the apps to Google for sanctions.

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About the Author: Femi Adeoya

Mr Femi Adeoya is a Chartered Forensic Accountant and a Certified Fraud Examiner. He has over 20 years professional work experience in accounting, finance and business management processes. As an Accounting Software Expert, he has implemented and supervised accounting solution set up of over 50 small and medium businesses in Nigeria. As a passionate blogger, Mr Adeoya is an ardent writer and communicationist. He is the CEO of QUICK LOAN ARENA (quickloanarena.com), the number 1 loan apps review website in Nigeria. He is very passionate about the quick and instant loan industry in Nigeria and has written over 200 reviews on different loan apps and digital banks in Nigeria, USA, Canada and UK.

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