SUBAIR MOHAMMED and LANRE ADEWOLE write on the horror of small-scale lending in Lagos.

"Wherever you may be now, you and your family shall die a miserable/sorrowful death with your hands and legs broken…”

This was a message a loan defaulter in Lagos State claimed a lending company which he subscribed to sent to him. Many of these lending companies have been established to employ extreme recovery action plans against their debtors.

However, with the Lagos State Consumer Protection Agency (LASCOPA) claiming lack of jurisdiction, six Federal Government agencies have swung into action against such online lenders in Lagos.

The six agencies are the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and Other Related Offences Commission (ICPC) Central Bank of Nigeria (CBN), National Human Rights Commission (NHRC), National Information Technology Development Agency (NITDA) and Federal Competition and Consumer Protection Commission (FCCPC).

Now known as loan sharks, the activities of the money lenders in the area of recovery have got more of their victims contemplating suicide, according to NITDA, which first raised the alarm about their operations.

According to the agency, over 40 petitions were received from online loan borrowers complaining of breach of privacy and abuse of personal data by the lending companies.

Concerned about the worrisome effects of the money-lending companies on families, friends and the society at large, the agency revealed: “Some of the complainants had contemplated suicide, indicating that the government needs to do more to protect vulnerable Nigerians. To address the alarming rate of data privacy abuse by money lending operators, the agency has therefore found the FCCPC as a key stakeholder to rein in the activities of some micro-money lenders who have formed a penchant for abuse of personal data of Nigerians.

“These operators execute this by abusing their personal data, breaching their privacy and sharing it with others who are not part of the initial contract.”

NITDA said its investigation led to the imposition of a N10 million fine and other administrative sanctions on a certain lending company.

The lending company has its head office in Agidingbi, Ikeja. Nearly all the online lenders have their operational headquarters in the state considered as the commercial capital of Nigeria. The affected company listed N100,000 as the maximum it gives out for 4.5 per cent interest at a maturity period of between seven and 190 days.

The Federal Government agency said in a statement that “investigations revealed that complainant’s contacts who were neither party to the loan transaction nor to the processing of their data have confirmed the receipt of such messages.

“The agency’s investigation further revealed that the company embeds trackers that share data with third parties inside its mobile application without providing users information about it or using the appropriate lawful basis.”

Joint operation

With the Federal Competition and Consumer Protection Commission (FCCPC) taking over the complaints, it launched a six-agency joint task force known as the Joint Regulatory and Enforcement Task Force to investigate the alleged rights violations in the money-lending industry.

Speaking on the joint probe, the Executive Vice Chairman/Chief Executive of the commission, Mr Babatunde Irukera, said:

“Pursuant to Sections 17(a), (e), (g), (h), (i), (m), (s), (x), (y), (z); 123; 124; 127; 129; 130 of the Federal Competition and Consumer Protection Act (FCCPA), 2018, FCCPC, on November 10, 2021, hosted a meeting attended by the Chief Executive Officer of the Independent Corrupt Practices Commission (ICPC), and representatives of the National Information Technology Development Agency (NITDA) and the Central Bank of Nigeria (CBN) in leading an effort to address multiple potentially dubious conduct of certain money lenders otherwise known as loan sharks.

“Continuing complaints about questionable repayment enforcement practices, including public shaming and violations of privacy, arbitrary, unjust, unreasonable or exploitative interest rates and/or loan balance calculations, harassment and failure of consumer feedback mechanisms, among others, have led to significant and understandable consumer aggravation and dissatisfaction.

“Initial inquiries demonstrate that many of the purported lenders are not legally acceptably established or otherwise licensed by the appropriate authorities to engage in the services they ostensibly provide. The meeting resolved to collaborate and pursue urgent enforcement action against already known violators while investigating others, as well as criminal prosecutions where applicable. A joint task force of analysts and enforcers was also created and immediately activated.

“The agencies recognise and welcome products and providers that bridge or close the lending gap to consumers who would otherwise be ineligible for conventional loans from traditional financial institutions, as well as the scalability and ease of access to financing for many people. However, this must occur within legally acceptable parameters of transparency and fairness.

“In furtherance of resolutions from the meeting, and the commission’s role in coordinating the government’s response, the commission has created a dedicated email address, to receive complaints, and or any information about any experiences, identity of businesses or individuals involved in these practices or any other relevant information that may be helpful to the investigation. The e-mail address is: lenderstaskforce@fccpc.gov.ng.”

When LASCOPA, the state agency in charge of consumer protection, was contacted on its public line, 08124993895, on whether it was collaborating with its federal counterpart on online lending and other lending activities, a male voice from the other end told Saturday Tribune that “It (money lending matter) is outside our jurisdiction. We don’t handle such cases.”

When the Lagos office of the FCCPC was contacted on 08147170730, its public number, the lady who answered the call said her boss who could speak on the extent of the probe and the progress made so far was in a meeting and would revert in about two hours. As of press time, the promise was yet to be fulfilled.

Horrendous tales

Victims of loan sharks have shared their horrible experiences at the hands of some of the lending companies while alleging police complicity.

Many of them described their experiences as dehumanising and frustrating while also complaining about public shaming and the invasion of their privacy.

One of the victims, Mama Ezekiel, a petty trader, related how she was locked up in a toilet by officials of a money lending company located in Orile. According to her, she was locked up for defaulting in the repayment of a N4,000 weekly loan despite having been previously consistent in her payment.

She said: “I got a loan of N40,000 from (name of the company withheld) at Orile, Lagos. I was meant to repay the loan with N11,500 interest and N4,100 weekly for 10 weeks. In spite of my not-too-thriving business, I was consistent in paying until the last two weeks when I was stuck financially.

“I couldn’t meet up with the payment for that particularly week and I called my agent to inform her of my predicament. She invited me over to their office for discussion. I was shocked when two female staff of the company led me to the toilet where I was locked up until my husband came looking for me in the night. He had no choice but to pay the money and I was released immediately afterwards.”

Another victim (name withheld) told of how he was threatened and publicly disgraced by a lending company over a N3,575 loan balance after the lender (name withheld) allegedly sent out damaging messages to all his contacts and relatives.

He alleged the complicity of police personnel in the unorthodox act of loan recovery, claiming that he got an electronic mail from the Nigeria Police Force, on behalf of the lending company, in which he was instructed to report at the nearest police station within 24 hours of receipt of the mail.

“I have paid the loan I collected from the lending company with interest. I was surprised when I got a call from their collection agent demanding for the payment of N3,250, being an accumulated interest on the loan. This was over a year ago. I never thought of it as something serious until a friend alerted me to an offensive message attached with my picture and sent to all my contacts all because of N3,250 interest which I never owed.

“They threatened to arrest me. They called me endlessly and forged a warrant of arrest from a high court sitting in Badagry on the logo of the Nigeria Police Force, Allegation and Disciplinary Unit,” he explained.

In this particular case, a journalist, who is a friend of the borrower, got an unsolicited message from the lending company reporting the borrower and trying to shame him.

As with others, the journalist never knew his friend took any loan about a year ago and he was still at a loss as to how the lender got his mobile phone number to send the shaming message.
NITDA appears to have provided a clue with its discovery that the lenders usually fraudulently “embed trackers that share data with third parties inside its mobile application” without the knowledge of the borrowers.

Dubious arrest warrant?
The content of the email headlined ‘Breach of Lending Policy’ and allegedly sent to the victim by the Allegation and Fraud Unit of the Nigerian Police Force, dated October 13, 2021, which was sighted by Saturday Tribune, reads:

“To whom it may concern. Complaint has been made as regards your default position with an online loan platform (name withheld) which includes breach of agreement terms and fraudulent financial practice. These are punishable under Section 98A, Paragraph 6 of Criminal Act (C.C.A) 1990. An arrest warrant has been issued by the Chief Magistrate, High Court that sits at Badagry Judicial Division, High Court of Lagos State, GRA Road, Badagry, Lagos State. We shall commence arrest as due through the nearest police division to your location in 24 hours from when this letter is sent.”

Twenty-four hours after the receipt of the first mail without any response, the borrower alleged that he got another email from the said unit of the police titled ‘Breach of Debt’. The mail read:

“Prior to the mail sent yesterday, it is clear that you have shown a high level of negligence. We have looked into submissions against you and we have sufficient reasons and evidence to implement penalties in line with the Money Lending Law and Regulation of Consumer Credit in Nigeria alongside Money Lenders Act 12 as amended. We strongly advise that you offset your loan immediately as penalties shall be melted (sic) out from 14th of October, 2021 at exactly 4:00pm.”

When contacted to confirm the authenticity of the email, the spokesperson of the state police command, Mr Adekunle Ajisebutu, requested that copies of the email be forwarded to him.

Responding after sighting the emails, Mr Ajisebutu sent a WhatsApp message which reads: “You may wish to contact Special Fraud Unit at Ikoyi, please.”

The Special Fraud Unit, which Ajisebutu directed Saturday Tribune to, is currently headed by Ibrahim Lamorde, a Commissioner of Police and former chairman of the EFCC. On its website, the unit describes “investigation and prosecution of serious and complex fraudulent cases within and outside the country” as part of its mandate.

Certainly, N3,250 won’t qualify as serious and complex case and the email was specific about coming from the regular police and not SFIU. The borrower was also told his arrest would be carried out by the nearest police station and wasn’t invited to the Ikoyi office of the fraud unit.

Mixed feelings

On social media, the online lenders are still not too loved but not without a sympathiser.

Their victims, who have now bonded under the Mobile Loan Apps Debt Victims in Nigeria, complete with a Facebook page, spoke of their unpleasant experiences doing business with the lenders.

A victim, Adeola Ranti wrote: “I nearly get (sic) high blood pressure from the dragging I got from the lending company. With the high interest rate, I ran into a loss. I got lean to the point that people thought I had HIV/AIDS.”

Another victim lamented:

“This (sic) loan Apps companies has (sic) caused me sleepless night. They hacked my account and sent shaming and derogatory messages about me to my contacts. I am still living with the aftermath of the disgraceful act.”

Another victim said:

“Charging huge interest rates on your loans, disgracing and blackmailing customers that default and you expect such satanic business to thrive? You are joking. Satanic loan sharks, your end have (sic) come.”

Vikky Freedom, another victim of the online money lending operators complained about how she failed a course and almost committed suicide. She wrote:

“I have downloaded different loan apps just to pay back the loan I collected from (company’s name withheld). When I couldn’t keep up with it anymore, an agent called, threatening me to the point that I began to cry.

“I had to switch off my line because of the loan apps agent. They followed me everywhere I go (sic). I was so devastated that I failed a course and almost lost my job. I began to contemplate suicide because of the way I was publicly shamed. Some days, I would sit and get lost in thought. I know I have collected loan from the devil and I am about taking a break from school because after paying their loan, I won’t be able to pay my school fees.”

However, it is not all about condemnation for the lenders.

Michael Stephen wrote:

“Inside life. So you guys are happy taking loan and to pay back you refused to pay back. Nigerians would forever be backward no matter what. I took a loan from them and paid back before my due date and took another one without stress.”

When Saturday Tribune reached out to a certain lending company for its reaction to the indictment by investigating agencies and the N10 million fine imposed on it, the contact number, 08148799371, provided on its site was not reachable. (Saturday Tribune)

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