Customers of online money lenders have raised serious concerns about the undignified tactics employed by these lenders to recover loans. These unlawful practices, as reported by the victims, include falsely declaring the borrowers deceased, creating and circulating their obituaries to friends and family, or falsely labeling them as HIV positive.

Several aggrieved customers have shared their experiences of receiving messages informing their contacts that they have tested positive for HIV. One such message reads: "This is to inform the general public that xxxxxx with phone number 09034056*** has tested positive for HIV/AIDS and escaped from the healthcare facility with the mindset of infecting the public. Kindly avoid her and contact the nearest police station or healthcare center so that she can be apprehended and taken back to the health center."

Investigations conducted by LEADERSHIP Data Mining Department reveal numerous similar cases involving online money lenders and their clients, who resort to sending warning SMS messages to the contacts of defaulters. These messages not only damage the reputation of the borrowers but also portray them as individuals of questionable character. Despite efforts by regulators, such as the Federal Competition and Consumer Protection Commission (FCCPC), to address these abusive practices, loan sharks—also known as fake loan apps—continue to persist in their cruel recovery methods in Nigeria.

These loan sharks prey on millions of Nigerians who lack access to traditional banking services or collateral, offering loans as low as N2,000. In return, borrowers experience character assassination, cyberbullying, physical abuse, public shaming, and extortion from these lenders. Many affected individuals have taken to social media to voice their complaints about harassment when they default and the unauthorized sharing of their contact details with third parties. These lenders employ aggressive tactics and charge exorbitant interest rates of up to 45% per annum. To assess the borrowers' risk, applicants are required to download an app, fill out a form, and grant access to their contacts. These lenders operate outside the boundaries of the law and are commonly referred to as illegal loan apps and platforms.

One specific loan app, 9Credit, has been accused of engaging in unethical practices such as charging customers exorbitant interest rates, offering loans for only seven days instead of the legally required minimum of 60 days, and resorting to defamatory and threatening behavior towards its customers and their contact lists.

Regulatory bodies, including the FCCPC, have taken steps to combat these issues. The FCCPC conducted search and seizure operations against five lenders, including Soko Lending Limited, based in Lagos. The National Information Technology Development Agency (NITDA) also imposed a N10 million ($23,900) sanction on Soko Lending Company Limited for privacy invasion. However, these efforts have not completely eradicated the menace of loan sharks.

Affected customers have called for the government to establish policies that facilitate easier loan collection from banks for individuals without salary accounts. They also emphasize the need for regulation of fintech startups to safeguard clients' human rights and privacy. Any fintech company found to be non-compliant with government rules and regulations or engaging in crude recovery methods should be apprehended and prosecuted to prevent physical or psychological harm to clients.

In conclusion, the battle against loan sharks in Nigeria continues, with online lending apps persisting in their blackmail and privacy invasion tactics. While regulators have taken action against some offenders, the problem remains prevalent. Nigerians are urged to exercise caution and be aware of the risks associated with borrowing from these platforms.