The Nigeria Data Protection Commission (NDPC) is intensively investigating more than 400 cases of privacy breaches attributed to digital lenders, commonly known as loan apps.
Despite Google’s April 2023 policy banning access to photos and contacts by loan apps, the intrusive practices persist, prompting the NDPC’s scrutiny.
In its Annual Report 2023, the NDPC highlighted the systemic nature of privacy breaches and proposed systemic solutions. It has drafted the Nigeria Data Protection Act-General Application and Implementation Directive (NDPA-GAID), emphasizing data ethics, privacy by design, and third-party platform accountability. The NDPC aims to compel third-party platforms to deny access to those involved in privacy breaches and urges communication networks to restrict or ban implicated telephone lines.
Collaborating with regulators through the Joint Enforcement and Regulatory Taskforce, the NDPC seeks to cleanse the digital lending sector. The Federal Competition and Consumer Protection Commission (FCCPC) now mandates lending companies to obtain data protection clearance from the NDPC before operation, a move aimed at safeguarding consumer rights.
Amid mounting complaints, Citizens’ Gavel, a consumer rights organization, has urged the FCCPC to address the unethical practices of unlicensed digital money lenders. Over 600 consumer complaints have revealed coercive debt collection tactics, including defamation and cyberbullying. Citizens’ Gavel implores regulatory collaboration to curtail the abuse of consumers by unregistered lenders.
Despite the FCCPC’s Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, challenges persist. While harassment cases have reportedly reduced, the FCCPC acknowledges ongoing issues and plans to introduce new regulations to tackle debt recovery challenges posed by loan apps.
