Predatory, fraudulent loan apps

Sometimes in 2021, a major decision was taken against bad loan applications in Nigeria for invading the privacy of their users and sending threatening messages to borrowers (practice regarded as a privacy invasion). These predatory and fraudulent loan apps either demand an illegal security deposit from customers or ask them to pay loan processing fees while some enjoy threatening and blackmailing customers at every opportunity.

The majority of these predatory and fraudulent apps have tenures ranging from seven to 14 days, which violate Google policy on loan apps hoisted on the play store and laws in Nigeria. Loan apps are required by Google policy to give borrowers at least 60 days from the day of issue to repay loan.

There has been an increase in the number of fraudulent apps with sole purpose of scamming helpless borrowers, requesting high increase rate and illegal down payment before getting loan.

The interest rates of these fraudulent loan apps are between 80 and 400 percent (crazy interest rate)

In view of the above, the following fact arose from a fact-finding exercise on digital lending apps; crazy high interest rate, loan company unregistered, fake office addresses, small loan amount with upfront deductions (interest and administrative/processing fees and short repayment period (seven days).

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Others include violation of local laws and Google policy, putting pressure on customers, customers getting scammed and defrauded as well as collecting customers vital information for small loans (BVN/ATM card pin e.t.c)

It is suggested that the NITDA should scrutinise all the digital lending apps and the predators and fake apps should be sanctioned.  The Central Bank of Nigerian – Consumer Protection Regulation and the National information Technology Development Agency should regulate the digital lending apps and save innocent Nigerians from predators.

Obong E

Obong4436@gmail.com