NDPC probes over 400 privacy breaches by loan apps in Nigeria

The Nigeria Data Protection Commission (NDPC) has launched investigations into over 400 cases of privacy breaches involving digital lenders, commonly known as loan apps.

This move follows growing concerns regarding the intrusive practices of these apps and their violation of data protection principles.

According to the NDPC’s Annual Report for 2023, numerous instances have been identified where loan apps accessed users’ contacts, pictures, messages, and other personal data without proper consent.

Despite attempts by platforms like Google to restrict access to sensitive user information, such as photos and contacts, loan apps persist in infringing upon users’ privacy rights.

The NDPC has highlighted the systemic nature of these privacy breaches and is collaborating with other regulators and third-party platforms to address the issue comprehensively.

As part of its efforts, the NDPC has drafted the Nigeria Data Protection Act-General Application and Implementation Directive (NDPA-GAID) to hold third-party platforms accountable for facilitating data breaches.

Additionally, the NDPC is working with regulators through the Joint Enforcement and Regulatory Taskforce to sanitise the digital lending space.

The Federal Competition and Consumer Protection Commission (FCCPC) now requires lending companies to obtain data protection clearance from the NDPC before operating, aiming to curb unethical practices and protect consumers from abuse by unlicensed digital money lenders.

Earlier this year, Citizens’ Gavel, a consumer rights organisation, filed a formal complaint with the FCCPC against 30 unlicensed digital money lenders operating in Nigeria.

The organisation cited numerous instances of harassment, defamation, and illegal debt collection tactics employed by these lenders.

Despite existing regulations, loan apps continue to engage in unethical conduct, prompting calls for stronger consumer protection measures.

In response to these challenges, the FCCPC is developing new regulations to address issues surrounding debt recovery by loan apps.

The Acting Executive Vice Chairman/CEO of the FCCPC, Dr. Adamu Abdullahi, has affirmed the commission’s commitment to safeguarding consumer rights and ensuring accountability in the digital lending sector.

As the NDPC and other regulatory bodies intensify their efforts to curb privacy breaches and unethical practices, stakeholders are hopeful that these measures will lead to a more transparent and responsible digital lending ecosystem.