The Nigeria Data Protection Commission (NDPC) is currently delving into more than 400 instances of privacy breaches related to digital lending platforms, commonly known as loan apps. This investigation comes amidst growing concerns over the intrusive nature of these apps and their violations of data protection and privacy principles.
In its recently released Annual Report for 2023, the NDPC highlighted the excessive intrusion posed by loan apps, noting that they often have access to users’ contacts, pictures, messages, and other personal data. Despite Google’s policy introduced in April 2023 to restrict loan apps from accessing such information, the practice persists.
The Commission is taking a systemic approach to address these privacy breaches by collaborating with other regulators and third-party platforms used by the lenders. It has drafted the Nigeria Data Protection Act-General Application and Implementation Directive (NDPA-GAID), which aims to tackle data breaches and enforce data ethics and privacy standards.
Additionally, the NDPC is working with regulators under the Joint Enforcement and Regulatory Taskforce to clean up the digital lending space. The Federal Competition and Consumer Protection Commission (FCCPC) now mandates lending companies to obtain data protection clearance from the NDPC before operating.
Earlier this year, Citizens’ Gavel, a consumer rights organization, lodged a formal complaint with the FCCPC against 30 unlicensed digital money lenders operating in Nigeria. The group cited over 600 consumer complaints detailing instances of unethical debt collection practices, including defamation, cyberbullying, and threats.
In response to these challenges, the FCCPC introduced the Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending in 2022. While over 260 digital lenders have been registered, cases of harassment and defamation persist, prompting the FCCPC to consider new regulations to address these issues.
The NDPC and other regulatory bodies continue to collaborate to protect consumers from misleading advertisements, false claims, and deceptive practices by unregistered and unlicensed digital money lenders. As investigations unfold and regulatory measures are strengthened, efforts are underway to ensure the integrity and privacy of individuals’ data in the digital lending landscape.
