Online loans

Reps call for tougher action against undue harassment – ​​Blueprint Newspapers Limited

The House of Representatives has decided to introduce stricter measures against online loan providers, who have a habit of harassing supposed guarantors, who in most cases know nothing about these loans.

On Wednesday, the House instructed its relevant committees, including Banking and Currency and Communications, to investigate the trend and report findings, for further House legislative action.

This was the consequence of a motion on the “need for strict measures to curb excesses by online loan providers”, sponsored by the Hon. Akin Alabi, who recalled that the far-reaching impact of the coronavirus (COVID-19) pandemic on the global economy has been significant, with evidence across all sectors of the economy, through which “an increasing number of Nigerians resorted to digital lenders to address urgent financial needs.”

He noted that the increase has been further aided as accessing loans from traditional financial institutions is often a long and laborious process, adding that “there is a growing increase in the number of digital lending service providers who have apparently simplified the lending process, and increased access to loans remotely and quickly”.

According to the legislator, several lending platforms however operate outside the principles of lawful processing of personal data as required by the Nigerian Data Protection Regulations and other relevant provisions on data protection in Nigeria,” a loophole which he claimed many online loan providers exploit.

He said that due to the growing need for financial assistance, providers were engaging in unfair collection practices by subjecting Nigerians to situations where their contacts were besieged by unsolicited messages from loan providers with the aim of force borrowers to pay.

“Online loan providers have resorted to a pesky habit of shaming as a tactic to get their customers to pay and take action that amounts to a breach of privacy, intimidation and harassment,” a- he said, adding that loan company debt collectors are mostly unprofessional and often use unethical methods, including posing as lawyers and security guards, in an effort to recover funds borrowed from
defaulting customers.