The House of Representatives, on Wednesday, unveiled plans to investigate the activities of online loan providers nationwide.
The resolution was passed sequel to the adoption of a motion sponsored by Hon. Akin Alabi, on the ‘Need to apply stringent measures to curtail the excesses of online service providers’.
In his lead debate, Hon Alabi observed that to cushion the impact of the COVID-19, a rising number of Nigerians have resorted to digital lenders to sort out urgent financial needs as traditional financial institutions were often painstaking.
He however noted that several lending platforms were operating outside the principles of lawful processing of personal data as required under the Nigeria Data protection regulation and other relevant provisions.
“The House is also concerned that many online providers are exploiting the growing need for financial assistance to engage in unfair collection practices by subjecting Nigerians to situations where their contacts are besieged with unsolicited messages in a bid to force the borrowers to pay.
The House is disturbed that the online loan providers have resorted to a pesky habit of shaming as a tactic to get their customers to pay and taking actions that are tantamount to privacy violation, intimidation and harassment.
“The House is also disturbed that some online lenders operating in the country do not have a privacy notice while some privacy notice of those who have is often not comprehensive enough to explain how a user’s data is processed.
“The House is worried that the recovery agents for the lending firms are mostly unprofessional and often apply unethical methods including impersonating lawyers and security officers, in a bid to recover borrowed funds from defaulting clients.
“The House is cognizant 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,” he noted.
On his part, to the debate, Hon Amadi Dennis (PDP-Enugu) who urged the Hos to thread with caution, underscored the need for regulatory agencies that licensed the operators to ensure compliance with extant laws.
Worried by the development, the House tasked CBN to make feasible regulations to curb the extremism of unscrupulous online loan providers in Nigeria.
The lawmakers also stressed the need for subnational Governments to put more stringent regulations in place to protect the interest of third party individuals from receiving unsolicited messages.
They also harped on the need for National Information Technology Development Agency (NITDA) to ensure strict adherence to the Nigerian Data Protection Regulation by all online loan providers.
To this end, the House mandated the joint Committees on Banking & Currency, Communications, and Human Rights to investigate the matter and report back within two weeks for further legislative action.
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