According to report reaching oyogist.com, the Federal Lawmaker, representing Egbeda/Ona Ara Federal constituency, Akin Alabi, has moved a motion to curtail the excesses of online loan providers in the Country.
The major loan providers had earlier resorted to underhanded tactics like harassing the entire contact list of alleged loan defaulters and breaching their privacy in the process.
Akin Alabi, in his motion stated that these companies have been operating outside the principles of fair and lawful processing of personal data as required under the Nigeria Data Protection Regulation and other relevant provisions on data protection in Nigeria.
Alabi called on the CBN to provide better regulation for these financial service providers, and for the National Information Technology Development Agency to ensure strict adherence to the Nigerian Data Protection Regulation by all online loan providers.
In his motion, the lawmaker said, “The COVID-19 pandemic’s far-reaching impact on the global economy has been significant, with evidence(s) cut-across all sectors; to cushion the adverse impact of the pandemic, a rising number of Nigerians are turning to digital lenders to sort out their urgent financial needs, as access to loans from the traditional financial institutions is often problematic and herculean.
“This reality is the major reason for the mounting influence of digital lending startups over the last couple of years. These start-ups are able to seemingly simplify the lending process and increase access to loans remotely and quickly;
“Aware that while many of these digital lending platforms have been able to foster access to credit and ensure a wider financial inclusion, a number of these platforms are also operating outside the principles of fair and lawful processing of personal data as required under the Nigeria Data Protection Regulation and other relevant provisions on data protection in Nigeria;
“Concerned that these online loan providers are exploiting the growing need for financial assistance, and engaging in unfair collection practices by subjecting many Nigerians to situations where their contacts (who are in no way privy or consented to any agreement) are besieged with unsolicited messages from loan providers in a bid to force the borrowers to pay;
“Disturbed that many of the online loan services have now resorted to this culture of “shaming” as a tactic to get their customers to pay. Tactics which raise questions hinged mainly on privacy violation, intimidation, and harassment;
“Also concerned that while going through the privacy notices of a few online lending applications that operate in Nigeria, some online lenders, either do not have a privacy notice or even where they have one, the privacy notice is not comprehensive enough to explain how a user’s personal data is.
“Further concerned that recovery agents who also work for these lending firms are unprofessional and unethical, willing to go to any lengths and employ whatever means, including impersonating lawyers and security officers;
“Persuaded that the Nigerian Data Protection Regulation was established due to the government’s recognition that information must be safeguarded, regulated, and protected against atrocious breaches. As such the Regulation frowns against the illegal processing of personal data;
“Resolves to urge the Central bank of Nigeria to develop feasible regulations that can curb the extremism of these unscrupulous online loan providers in Nigeria;
“Also urge the State Governments to ensure more stringent regulations that protect the interest of third-party individuals from receiving unsolicited messages not consented to; urge the National Information Technology Development Agency (NITDA) to ensure strict adherence to the Nigerian Data Protection Regulation by all online loan providers.”