Tobi had always been tech-savvy, but when his small e-commerce business faced a cash crunch, he was desperate for fast funds to keep things running. He turned to a loan shark, lured by the promise of a quick loan without documentation. What seemed like a short-term fix soon spiraled into a nightmare, not just financially but digitally.

The loan shark, operating through an online loan app, had access to Tobi’s personal data, including his phone contacts, emails, and even social media accounts. It wasn’t long before Tobi realized his information was being used for cybercrime. His data was sold to third-party hackers, his business accounts were compromised, and his identity was stolen. This new wave of loan sharking, combined with cybercrime, had devastating consequences not just for his business but for his personal life as well.

In today’s digital world, loan sharks are no longer confined to shady back-alley deals. They have adapted to the rise of technology, merging their predatory practices with the dark side of cybercrime. Understanding this growing threat is crucial to protect yourself and your business from these dangers.

The New Face of Loan Sharks

Loan sharks have long been known for their illegal lending practices, offering loans at astronomical interest rates and using threats or violence to collect repayments. In the past, these operations were mostly physical, with loan sharks targeting individuals or small business owners in their local areas. However, the rise of the internet and mobile technology has given loan sharks new ways to exploit vulnerable people.

Now, these criminals are setting up online loan platforms that appear legitimate on the surface. Many of these apps or websites offer fast cash with no collateral or documentation required, attracting those who may not qualify for traditional bank loans. What borrowers don’t realize is that they’re not just signing up for a loan; they’re exposing themselves to a wide range of cyber risks.

The Connection Between Loan Sharks and Cybercrime

Cybercrime involves the use of technology to commit fraud, data theft, hacking, and other illegal activities. Loan sharks have increasingly started using cyber tactics to enforce payments, steal information, and defraud their victims.

Here’s how loan sharks and cybercrime intersect:

Data Harvesting
Loan sharks who operate online apps or websites often require access to personal data as part of their “loan application” process. Borrowers are asked to grant permissions that allow the app to access contacts, messages, emails, and sometimes even social media accounts. Once this data is harvested, loan sharks may use it to harass borrowers, blackmail them, or sell their information to hackers.

Cyber Harassment
Borrowers who fail to repay their loans are often subjected to cyber harassment. Loan sharks may send threatening messages not just to the borrower but also to their contacts. This is a common tactic used to shame individuals into paying. In extreme cases, they may spread false information online, damaging the borrower’s reputation both personally and professionally.

Identity Theft
Many victims of loan sharks have found that their personal and financial information is used for identity theft. With access to sensitive data like bank account numbers and government-issued IDs, loan sharks can sell this information on the dark web or use it for fraudulent activities. Identity theft can lead to legal complications, financial loss, and even criminal charges against the victim.

Ransomware Attacks
In some cases, loan sharks have partnered with cybercriminals to conduct ransomware attacks on businesses. If a borrower owns a small business, their computer systems may be hacked, and sensitive data locked until a ransom is paid. This form of cyber extortion leaves businesses vulnerable and can force them to pay outrageous sums to regain access to their own systems.

How to Protect Yourself from Loan Sharks and Cybercrime

While loan sharks pose a serious threat, there are ways to protect yourself and your business from falling victim to their predatory practices. Here are some practical steps to safeguard your finances and data:

Avoid Unregulated Loan Apps Before applying for any loan through an online platform, ensure that the lender is registered and regulated by government authorities like the Central Bank of Nigeria (CBN). Many of the apps available on popular app stores operate illegally and harvest personal data. Always check the legitimacy of the lender.

Be Careful with Data Permissions Be cautious when granting permissions to apps. Legitimate financial institutions will not ask for access to your contacts, emails, or personal messages. If an app requests excessive permissions, it’s a red flag.

Use Strong Passwords and Two-Factor Authentication Protect your online accounts by using strong passwords and enabling two-factor authentication. This adds an extra layer of security and makes it harder for cybercriminals to gain access to your information.

Monitor Your Credit and Financial Accounts Regularly monitor your credit report and financial accounts for any signs of fraudulent activity. If you notice any suspicious transactions, report them immediately to your bank and the relevant authorities.

Keep Backup of Business Data If you run a small business, make sure you have regular backups of your important data. This will protect you from ransomware attacks, as you will not be reliant on hackers to recover your files.

Report Cybercrime to the Authorities In Nigeria, cybercrime can be reported to the Economic and Financial Crimes Commission (EFCC) or the Nigerian Cybercrime Agency. If you suspect that you’ve fallen victim to a loan shark or a cybercrime operation, report it immediately to the relevant authorities.

A Step-by-Step Solution: Securing Legitimate Loan Options

If you’re in need of a loan, it’s important to know that there are ethical, legitimate lending options available. Here’s how to secure a loan safely:

Research Registered Lenders
Always ensure that the lender is registered with regulatory authorities. In Nigeria, lenders should be registered with the CBN, and you can verify their status online.

Review Loan Terms Carefully
Make sure to read and understand the loan terms, including interest rates, repayment periods, and penalties. Legitimate lenders will provide you with clear and transparent contracts.

Compare Different Lenders
Don’t rush into accepting the first loan offer you get. Compare rates and terms from multiple lenders, including banks, microfinance institutions, and government-backed schemes.

Keep Your Data Secure
Use reputable financial platforms that have strong data protection policies in place. Never share your financial details over unsecured websites or apps.

Conclusion

Loan sharks and cybercrime are a growing threat in today’s digital world. By merging their illegal lending practices with cybercriminal activities, loan sharks are able to exploit their victims in ways that extend beyond financial loss. The combination of harassment, data theft, and identity fraud can ruin lives and businesses.

Protect yourself by avoiding unregulated lenders, securing your data, and choosing legitimate loan options. By staying informed and vigilant, you can safeguard your financial future and avoid the devastating consequences of loan sharks and cybercrime.