The deployment of technology and artificial intelligence into human endeavours has extended to the financial services sector with the emergence of digital lending companies often ascribed the name “Loan Apps” who give out non-collateral backed loans to customers without the regular paper works often associated with obtaining loans from traditional banks.

A major cause of concern however lies in the fact that these digital money lenders often resort to crude, unprofessional and unconventional means to coerce overdue customers to clear their outstanding indebtedness. This they do by resorting to criminal defamation, harassment, cyberbullying, cyberstalking, death threats, breach of data privacy rights, etc to coerce compliance from defaulting customers.

This piece aims at highlighting the remedies available to a customer who is victim of the shylock tactics often employed by these loan apps to recover outstanding loans:

  1. Petition to the Regulatory Authorities: Digital money lenders are generally regulated by the Central Bank of Nigeria (CBN), National Information Technology Development Agency (NITDA), and the Federal Competition and Consumer Protection Commission (FCCPC). Thus, the first relief open to an aggrieved customer is to write and submit a petition to these regulators to impose the necessary fine on the lender for breach of industry and lending regulations. To that end, the regulators may impose the necessary fines as stipulated under its establishment Act on the lender. A recent example is the fine of “SOKOLOAN” a digital lending company, by NITDA in 2021 following several petitions/complaints regarding breach of its customer’s data.
  2. An Action for Enforcement of Fundamental Human Right: The activities of digital money lenders often involve obtaining personal data of customers such as name, address, occupation, data of birth, email address, passport photograph, BVN, etc to perform risk assessment as well as determine the creditworthiness of the borrowers. By doing this, the lenders operate as data controllers who must adhere to the dictates of the Nigeria Data Protection Regulation (NDPR) in the handling and processing of customer’s data. Therefore, when personal data of a customer is breached by a lender via sending defamatory messages to contacts (third parties) who were not privy to the loan arrangement with the lender, the borrower and such third party can institute an action for the enforcement of their right to privacy as data privacy rights have been held to be subsumed under the right to privacy guaranteed and protected under Section 37 of the 1999 Constitution of the Federal Republic of Nigeria.
  3. An action for Defamation: Another relief open to a victim of the crude and unscrupulous recovery mechanisms of digital money lenders is to maintain an action for defamation of character. For such an aggrieved customer to succeed in the defamation suit, he or she must prove that: 1

a.The imputation complained of is defamatory;2

b. It refers to him/her (the customer);

c. It was published.3

Where this can be successfully proved in court, a successful action for defamation of character will avail the aggrieved customer.

4. Report to Law Enforcement Agents for Criminal Defamation: An aggrieved customer can also file a petition or complaint with the law enforcement agencies like the Nigerian Police Force (NPF) for criminal defamation, cyberbullying, cyberstalking, etc pursuant to the Criminal code or criminal law of the state, Cybercrimes (Prevention and Prohibition Act, 2015, etc.

To do this, the police would begin investigation into the matter and invite the person who sent the defamatory messages. Where such persons could not be located which in most times is usually the case, the police start by tracking the number to detect the person’s location before effecting an arrest after which full investigation would be launched. Where there is evidence of crime, such person is charged before the court and prosecuted accordingly.

While the foregoing is not an exhaustive list of remedies available to an aggrieved victim of cyberbullying and defamation by digital money lenders, they represent some of the quickest and definite modes of seeking immediate redress against a rogue loan app with unprofessional agents who are bent on tarnishing their customer’s image and resorting to commission of crimes to recover their bad loans.

 1.See the case of Zenith Plastic Industries Ltd v. Samotech Limited (2007) 16 NWLR (Pt. 1060) CA 315

 2.See the case of Okafor v. Ikeanyi & Ors (1979) 3-4 SC (Reprint) 65; (1979) LPELR-SC. 133/1976

 3.See the case of Skye Bank Plc v. Akinpelu (2010) 8 NWLR (Pt. 1198) SC 118; Onu v. Agbese (1985) 1 NWLR (Pt 4) SC 704

Written by Muhiz Babatunde Adisa for The Trusted Advisors

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