At times in 2021, a major decision was made against bad loan applications in Nigeria for invading their users’ privacy and sending threatening messages to borrowers (a practice considered an invasion of privacy). These predatory and fraudulent loan apps either demand an illegal security deposit from customers or ask them to pay loan processing fees, while some like to threaten and blackmail customers at every opportunity.
The majority of these predatory and fraudulent apps have warrants ranging from seven to 14 days, which violates Google’s policy on lending apps hoisted on the Play Store and laws in Nigeria. Loan applications are required by Google policy to give borrowers at least 60 days from the date of issuance to repay the loan.
There has been an increase in the number of scam applications with the sole purpose of scamming helpless borrowers, asking for a high rate of increase and an illegal down payment before getting a loan.
The interest rates of these scam loan apps are between 80-400% (crazy interest rate)
Considering the above, the following fact arises from a survey exercise on digital lending apps; Extremely high interest rate, unregistered loan company, 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 violating local laws and Google policy, pressuring customers, customers getting scammed and defrauded as well as collecting vital customer information for small loans (BVN card pin/ ATM, etc.)
It is suggested that NITDA review all digital lending applications and that predators and fake applications be punished. The Central Bank of Nigeria – Consumer Protection Regulation and the National Information Technology Development Agency should regulate digital lending applications and save innocent Nigerians from predators.