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Online loans: When fraudsters, hackers pose as money lenders

• Whenever my phone rings, I flinch in dread and despair –Anurika

• I don’t care whether you’re sick or not! If you want to die, die! But pay that money first –Lender

• It’s causing mental health issues, suicide, depression –Experts

• Most’re not known to us –CBN


Many Nigerians, who took loans from online money lenders, are now shadows of their former selves following invasion of their privacies, harassments and threats to their lives by the lenders’ agents. In this report, JULIANA FRANCIS looks at the impact of the money lenders’ actions on the mental health of the borrowers


Anurika is a picture of anxiety. As she spoke with our reporter, she repeatedly glanced at her phone whenever it beeped a notification sound. She appeared to be absentminded.


Whenever the phone rang, she would become tensed and would then scrutinise the unknown caller number, debating and battling with unheard voices in her head whether to take the call or ignore it. Before taking the call, she would mentally prepare herself and would then listen to the virulent voice on the other side of the line, cursing, insulting and threatening. This drama is what has characterised her daily living for months.


A particular caller thundered: “I don’t have much time to talk to you okay? Just make sure you make your payment, if you don’t want a problem for yourself. We are going to start our action and it’s going to take effect tonight.” According to Anurika, before, whenever she receives such calls, she becomes enveloped with sadness, and will go into her room to cry for hours.


She wouldn’t be able to eat, sleep and would be experiencing headaches, with her heart pounding at the sound of notifications or ringing of her phone. Anurika is one of hundreds, if not thousands, of Nigerians who embraced the online borrowing scheme and are presently suffering mental torture caused by the online lending platforms. Peace, it seems, has departed from the lives of borrowers like Anurika.


She sighed tiredly: “They can call you more than 10 times a day, using different agents. As they are calling and insulting you, they will also keep sending WhatsApp messages; it’s just too much for me! “One of them that I owed N6,000 called, ordering that I should go and pay before noon.


The truth, however, is that I had been ill and my business had shut down. When I tried to explain about my failing health, he cut me short, saying, ‘I don’t care whether you’re sick or not! If you want to die, die! But pay that money first.’ “There are days I felt like committing suicide because of these callers and their manners of speaking to someone. It’s like some of them went to a school where they trained them on how to insult people, with the insult hitting where it hurts most.


They’ll make me feel useless and I was always crying, asking myself what was happening to my business, my life and why I am in such debt? I hear voices asking me what I’m still doing alive when I’m so useless.” Online lending platforms in Nigeria may have been in existence for long but the advent of the COVID-19 made it become prevalent, with many firms establishing their own online lending platforms.


The pandemic and its attendant lockdown for six months caused many Nigerians to lose their businesses and jobs, as many firms embarked on massive downsizing and salary reductions. Feeding became tougher and the period has been described by many as the worst economic meltdown in Nigeria.


Survival became the driving theme for households, leading them to embrace online lending platforms. The creditors call such loans, “soft loans.” The interesting thing about these loans is that the majority of the borrowers are vulnerable Nigerians, who are desperate to survive at all cost. The loans are as little as N5,000 and high as between N100,000 and N500,000.


Accessing high loans, however, depends on whether the borrower had originally been able to offset the smaller loans earlier collected. Immediately a borrower offsets the smaller loans, he or she receives a message, cajoling them to go for another loan. These messages are sometimes followed by phone calls from lenders’ agents, urging their clients to take heavier loans. If the borrower fails to meet up with offsetting the loans, either small or huge, the same lobbyists become terrorists.


These loans have become the worst nightmares of many Nigerians as the borrowers are constantly being harassed and threatened via phones by faceless agents. A good number of security experts and analysts are now describing these online lending platforms as scammers for allegedly acquiring the negative skills of infiltrating debtors’ bank accounts to pull out money at will. They also infiltrate debtors’ phone contacts, calling contacts therein, and telling them that their friend or relative “is a defaulter, who took loan and has vehemently refused to pay. Hence his /her action has proven to be suspicious.”


The reason for calling these contacts, according to some borrowers, is to cause them acute embarrassments, which, they insisted, affects their mental health. The borrowers also complained about the huge interest rates and the harassment fol-lowing inability to meet up with due dates of refund.


There are also complaints of calls, SMS and harassment of borrowers’ guarantors and those that are not even guarantors. Anurika recalled that she got to know about online lending platforms through family friends when her business crashed in 2020 occasioned by the outbreak of COVID- 19 and the subsequent lockdown. She said: “These friends made me understand that they had also used such loans to invest and rebuild their businesses. They got to know about it during the COVID-19 lockdown. I decided to give it a try.”


The woman added that although some of the interests on the loans were outrageous, she still collected it due to desperation and the need to stabilise her business.

She said: “Then they started doing rubbish, harassing someone with phone calls, SMS and WhatsApp messages. It got to a stage, even after refunding, they’ll still keep calling that I’ve not paid. I had this habit of ‘saving proof of payments.’ I preferred paying with my bank App, and whenever I sent proof of payments, they’ll claim I paid into the wrong account number.


This was the same bank account detail I got from them. They’ll further claim that the payment didn’t ‘drop or reflect.’ I had to pay N30,000 on two occasions and that was even after full refunding to them.” She would later find out from other borrowers that most of the online lending platforms pull similar stunts on their borrowers; claiming that borrowers still owed them even after full repayment.


“They now began threatening me. I began to suspect fraud had crept into it and that some of them were fraudsters after they twice pulled N586,000 out of my bank account. None of them admitted pulling out the money. When I went to my bank, I was advised to change my Automated Teller






Machine (ATM) Personal Identity Number (PIN). My bank told me that a series of reports from customers, whose money was being pulled out of their accounts, had become alarming,” she added.


How they got contacts on borrowers’ phones


Anurika said that while applying for the loan online, the applicant will be asked for emergency contacts, people that can be reached in case of defaulting, and it’s usually a relative or close friend. “These emergency contacts must be on your contact list. If you don’t fill that space while applying for the loan, you can’t proceed to the next page.


They’ll ask for access to your contacts, SMS, WhatsApp and you’ll click Allow. If you don’t click Allow, you’ll not be allowed to the next step. However, there was nowhere they mentioned that they’ll call other contacts aside from emergency contacts. They’re only supposed to call the emergency contacts, but instead they go on calling everyone on our contact lists.


It’s just not right!” Anurika complained. She further narrated: “I thought I was the only person being affected by these threats, insults and incessant calls until I read the story of Rachel. She’s a chorister and owed an online lending platform N19,000. They called everyone on her contact list, including her pastor and church members.


The church pastor and members all started calling her, asking questions. She said that she almost went insane and started acting abnormally. She thought of killing herself because she’s popular in church. A brother in the church later sent her N20,000 to pay the loan. She said that she stopped attending the church because she felt disgraced, shamed and embarrassed.


She had a breakdown and always cried. As for me, it’s almost like I sold my happiness for a pot of porridge. I no longer have a rest of mind.” Anurika explained that on a particular day, she was weeping and thinking of ending it all, but then her phone rang. It was a friend, and when he asked her why she sounded despondent, she told him: “One of the agents of the lenders had just called, insulting me.


She called me stupid and an idiot. I told my friend that I was feeling so depressed and useless. I was useless to myself and my family. He shouted at me to stop talking in such a negative manner and reminded me that most people were in one debt or another. He talked me out of the negativity and thought of suicide.” She said that after paying off the loans, nothing on earth would make her ever take another loan from online lending platforms.


“The worst part is that after settling the debts, they’ll start romancing and cajoling you to take another loan, making it irresistible. I will never fall into that trap again!” she vowed.


Another victim is a mother of two, who introduced herself simply as Joy. She’s a nurse and her husband lost his job during the COVID-19 lockdown. Joy explained that since she took the loan and defaulted in payment, her life had become a circle of constant harassment, mental abuse and embarrassment.


She said: “They don’t care about our challenges but we’re human beings. But they don’t listen. Rather, they’ll call to insult you, until you begin to feel less like a human being.


They threatened to send messages to all my contacts and upload my pictures on different social media handles to show that I was a debtor. They also threatened to block my Bank Verification Number (BVN), that I wouldn’t be able to access my bank account and that they’ll unleash their lawyers on me. The calls are just too much!


They can call more than 10 times a day and each time it will be a different agent. Some will tell you to borrow from another lending platform to pay them.” Joy added: “I fall sick these days because I don’t have a rest of mind. I’m very unhappy. I’m so scared of picking calls.


Whenever my phone rings, I flinch in dread and despair. I’m feeling frustrated from this unending and unceasing siege and it’s affecting my mental health.


These troubles are enough to make anyone want to end it all. It can cause a heart attack. I particularly don’t pick phone calls that come with landline numbers. Most of them use landlines to call. It’s not as if I don’t service these loans. I do but these agents want it fast. It’s not always possible. They should exercise patience. The situation is affecting my blood pressure. I always have headaches; I don’t sleep and can’t eat well.


The calls, insults, threats are always disturbing my mind. I have lost weight. People keep asking me if I was sick.” She said that most of her family members and relatives in the village, including her father, now know that she took out a loan because these lenders had been calling everyone on her contact list.


“I didn’t use these people as my emergency contacts, but they just go on calling everyone,” she added. Joy said that these loans become too heavy for most borrowers to offset because of the interest rates.


“If you don’t meet the due date for repayment, they can add as much as N10,000 to your loan,” revealed Joy. She protested: “What they are doing is wrong! They invade our privacies to start calling our contacts. They call these names even after you’ve promised to pay them.


They are very insulting and talk to you as if they are talking to a child. We know we will pay, but we need time. The most annoying part is calling to harass you despite the fact that you’re servicing the loan.” Joy said that in October 2020, she discovered that a good number of the online lending platforms were being operated by fraudsters.


She narrated: “The most disturbing aspect which made me believe they are fraudsters was that one day, they sent a message to me, saying that they would hack my bank account.”


Another victim, Daniela, just like Joy, took a loan from Lcredit. She started using it in October. She complained of the agents’ draconian behaviours, shylock overdue charges and sheer maddening interest rates on the loans. She said: “After I discovered they were fraudsters, I stopped it. I also didn’t like the way they threaten clients.


The only reason I took a loan was because of the depressing economic situation in Nigeria. “The most annoying and frustrating aspect is that even after you’ve finished offsetting your loans, they’ll still continue to call, insisting you have not completed the payment, threatening and then lying that you paid into an undesignated bank account. I used it once and I must confess that it was not worth it.


How can you refuse to listen to human beings when they try to talk about their challenges and why the loan payment has been delayed? To tell you the truth, when they started threatening me, I was terrified.


They threatened to send messages to all my contacts, that I was a debtor and also threatened to block my BVN. Another App I had issue with was Paymoney; they are simply horrible and fraudsters! I don’t know how but they infiltrated my bank account and took money.


They removed N950,000 and I had to go and block my ATM.” Mr. Femi, a borrower, said the mental health situation is worst for someone like him, who used to be gainfully employed before everything crumbled like a pack of cards following the advent of COVID-19. Femi said that he had never been exposed to loans before in his life, stressing that this online lending platform was his first, and that every day he regrets the decision of taking the loans. He blamed his predicament on the harsh economy in Nigeria.


He said: “The way they talk, makes one to think of death. You can’t even have a rest of mind! There comes a point in the midst of your depression because of the harassing phone calls that you have to speak to yourself and urge yourself to choose life instead of death.

Sincerely, curses and threats can be extremely traumatic.” He noted that he had come to discover that commercial banks do not support these online lending platforms. He also discovered that these lenders hack into borrowers’ bank accounts. Femi said that he’s a victim of such a bank hack. He said: “I don’t think they’re all licensed.


The threats alone are enough to kill somebody. I think the government can regulate them in such a way that they’ll be more organised and structured.

Agents, especially the loan recovery agents, working for these platforms should be trained. Many of them are quacks and this is the reason they keep threatening. Some of the threats will make your heart skip a bit.”


Femi said that he knew about the shylock interest rates by most of these online lenders, “but when a man gets pushed to the wall, he wouldn’t have any choice than to look for the easiest surviving means.


The interest rate is killing but do we have a choice? At the point of taking the loan, you’re only thinking of survival. The Nigerian economy is very unfriendly to the common masses.”


A former President of the Crime Reporters’ Association of Nigeria (CRAN), who is also a security analyst, Mr. Christopher Oji, explained that some of his friends had been experiencing mental health issues due to the shabby treatments from these online lenders.


He revealed that his preliminary investigation showed that some of them are advance fee fraudsters. Oji also stated that most of them do not have offices in Nigeria. He said: “Most of them are operating from Arab countries.


They cajole you into collecting loans from them, and after that, you genuinely refund with interest, but thereafter, they still go ahead to hack your bank account and begin to pull out money. I’m still trying to find out how they are able to infiltrate someone’s bank account. I don’t know if they are working in connivance with bankers.


They can hijack BVN, and each time money goes into your account, they’ll start deducting. If you borrow N300,000, they will end up taking between N500,000 and N1,000,000. Some people have gone bankrupt and some are facing mental health issues because once their salaries are paid, they are forced to service loans, which they had already paid.”


Oji said that majority of his friends, who had completed servicing their loans, are still going through mental torture. “These people keep calling and harassing them to the point of making them pay money which they had already paid,” the security expert said.


He added that a journalist’s friend’s wife took a loan from one of these lenders and even after settling it, the lender’s agents kept sending messages to friends, colleagues and relatives, calling the man’s wife a debtor. He said: “It also happened to a friend of mine in Akure, Ondo State. She paid the loan but they continued to call and send threatening SMS.


They called people on her phone contact list, saying she would be disgraced if she failed to pay the loan. The woman, who said that she was feeling seriously frustrated, explained to us that she took a loan of N275,000, and that she had paid the money with interest.


They ended up collecting over N600,000 from her bank account. She had to stop using her bank account because any time money goes into it, they’ll deduct from it. This is why I said there’s an inside connection with banks. As I’m talking to you right now, that woman is facing psychological trauma because of the incessant calls from these lenders.


Every morning, her contacts will receive messages from these lenders. It’s pure harassment and mental torture.” Oji recalled that he had also received messages from one of the online lenders, telling him that he stood as a guarantor to a borrower, which was not true.


He said: “This person was not even a friend, just an acquaintance and when I called her, she denied using me as a guarantor. She also told me that she had, for long, completely settled the debt.


She said that they had continued to collect extra money from her. Imagine the embarrassment they were causing this woman and so many other Nigerians.” Oji advised Nigerians to stop patronising these online lenders. He further suggested they should go to banks, cooperatives or individuals for loans.


“But make sure wherever you’re borrowing money, it has an address domiciled in Nigeria. I’m begging Nigerians to stop patronising these online lenders because I know someone who had attempted suicide because of the disgrace, harassments and threats he incessantly received from these people.


He attempted to take sniper (an insecticide). They called all his contacts, telling them he was a debtor but he had already paid them. They also infiltrated his bank account and were deducting money from it. Some people borrowed money from these online lenders to tackle health challenges but these people are adding to their health problems.


These borrowers can die of hypertension,” he added. A clinical psychologist, Mr. Akin Gabriel, said: “This can lead to feelings of worthlessness, fear, worries, anxieties, sadness, agitation and anger, which can also lead to withdrawal into self, not enjoying activities, which they used to enjoy.


They will have poor sleep, poor appetite, amongst other problems. If these continue significantly for some time, it could lead to depression.”


A Consultant, Behavioural Medicine, Dr. Dominic Ogbeche, said: “Any major life event or stressful life event or issue that can cause anxieties and worries; if it’s consistent and persistent, often leads to depression.”


A psychologist, Ayodeji Nathaniel, said that mental health issues caused by actions of the online lending platform are real. He added: “I have clients and friends who have shared their experiences with me, with some seeking psychological First Aid.


These online loan lenders really understand the situation of the country and take advantage of the vulnerable in the society. People opt for loans at a very critical stage where they hope they’ll be able to meet up, and when they can’t meet up, it affects them. Most people affected are those with low self-esteem, the lonely and those with personality issues.


They exhibit these distress symptoms which also can relate to different mental health issues up to even attempting suicide.” Nathaniel stated that the real solution is that no matter what anyone is going through, he or she should not keep quiet.


He noted that sharing problems helps. The psychologist added that sometimes, when people share their problems with someone, the person can link them to expert care which can provide psychological first aid.


The Deputy Director, Medical Social Services at the Lagos University Teaching Hospital (LUTH), Titilayo Tade, a clinical psychologist, said that harassing phone calls from money lenders can make someone to develop mental health issues, become depressed and suicidal.


She said: “If you’re in debt and you don’t have money, it becomes a challenge. The truth is that everyone needs money to function in his or her daily life. Some may have lost their jobs and they begin to take loans to meet their needs. Challenges like that can make people start having health issues and fear.


The person may start to fret.” Tade stated that a lot of shame is involved in it, adding that the person might feel ashamed that he or she took a loan and couldn’t repay it. She continued: “Men are especially affected. There’s a lot of emphasis that most of them couldn’t provide for their families.


So, being in debt can put a lot of stress on anyone and can affect the person’s mental health. There are some studies that have linked suicides to debts. There’s a study in 2013 or 2014, that people who died by suicides are more likely to be in debts than anyone else. Being in debt makes a person worry a lot, wondering when they’ll be able to pay.


Then there are anxieties together with the lenders always calling, asking for their money, sending SMS to loved ones. These loved ones may not know before now that the person had been having financial challenges. Sending SMS that their loved ones borrowed money and had refused to pay, calling the person a defaulter is putting additional anxieties and pressure on him or her.”


Tade said that further pressure on the borrower continues when all efforts to make money have been futile. She said that condition might be trying, especially if the person needs to borrow again and nobody is willing to give.


“There’s a feeling of hopelessness and helplessness; these are the key factors in depression. We know there is a high link between depression and suicide,” the clinical psychologist said.


The spokesman for the Central Bank of Nigeria (CBN), Osita Nwasonibi, when asked about these online lenders’ violations of customers’ rights, harassments and threats, replied: “They are not licensed by the CBN and therefore, not under the regulatory purview of the bank.”


Mr. Babatunde Irukera is the Executive Vice Chairman and CEO of the Federal Competition and Consumer Protection Commission (FCCPC), which is saddled  with the responsibility of developing and promoting fair, efficient and competitive markets in the Nigerian economy, and to also facilitate access by all citizens to safe products and secure the protection of rights for all consumers in Nigeria.


Irukera, in an interview with Nairametrics, while speaking about online lenders stated: “It seems like they mirror the contact list of the borrower and just publish SMS to everyone on the contact list. It’s an incredible violation. People can get easily exploited over the internet.


Right now we’re convening a meeting that involves FCCPC, CBN, Economic and Financial Crimes Commission (EFCC), National Human Rights Commission (NHRC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC) on how to manage this because none of these entities are licensed to provide these services.


“What is worse is you can’t even find some of them. They don’t have an address. As a matter of fact, in an investigation with the ICPC, it turned out that one of them was operating from France, which presents a difficulty. What we’re doing is trying to educate consumers not to do business online with people they can’t see.”


Perturbed by these emotional attacks and other infractions on the rights of Nigerians who patronise these online lenders, FCCPC, CBN and ICPC had a brainstorming meeting and agreed that the unorthodox money lenders indulging in crude methods of enforcing repayment such as public shaming and violations of privacy, arbitrary and exploitative interest rate charges will soon meet the wrath of government.


The group explained that continuous 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.


On November 11, the National Information Technology Development Agency (NITDA) entered into a strategic partnership with FCCPC to tackle data abuse by money lending operations.


The Head, Corporate Affairs and External Relations, NITDA, Mrs. Hadiza Umar, said: “NITDA has found the FCCPC as a key stakeholder in its efforts 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.


The Agency has received over 40 petitions from members of the public on the personal data abuse of some lending companies. Our investigation led to the imposition of a N10,000,000 fine and other administrative sanctions on Soko Lending Company.”


Umar stated that NITDA is concerned about the worrisome effect the nefarious activities of the money lending companies are having on families, friends, and the society at large.

She added: “Some of the complainants had contemplated suicide, indicating that government needs to do more to protect vulnerable Nigerians. The partnership with FCCPC will lead to a more robust and concerted regulatory approach, and ensure Nigerians get necessary reprieve from the illegal use of their personal data for money lending operations.


The partnership would entail joint investigations, enforcement and possible prosecution. We therefore use this medium to inform all money lending operators and other data controllers and processors that NITDA is set to enforce the privacy rights of Nigerians in line with the Nigeria Data Protection Regulation (NDPR) 2019.


Controllers and processors who seek guidance on compliance with the NDPR should contact NITDA licensed Data Protection Compliance Organisations (DPCO).” Umar reminded online lenders that sometimes in August, the Agency wielded the big stick and sanctioned an online lending platform, Soko Lending Company Limited (Soko Loans), for privacy invasion.


This action was taken after the Agency received a series of complaints against the company for unauthorised disclosures, failure to protect customers’ personal data and defamation of character as well as not carrying out the necessary due diligence as enshrined in the Nigeria Data Protection Regulation (NDPR).


Soko Loans grants its customers uncollateralised loans and requires a loanee to download its mobile application on their phone and activate a direct debit in the company’s favour. The app gains access to the loanee’s phone contacts.


According to one of the complainants, when he failed to meet up with his repayment obligations due to insufficient credit in his account on the date the direct debit was to take effect, the company unilaterally sent privacy invading messages to the complainant’s contacts. Investigation revealed that complainants’ contacts who were neither party to the loan transaction nor consented to the processing of their data have confirmed the receipt of such messages.


Umar said: “The Agency made strident efforts to get Soko Loan to change the unethical practice but to no avail.


After the Agency’s investigation team secured a lien order on one of the company’s accounts by which it could come up with privacy enhancing solutions for its business model, Soko Loan decided to rebrand and direct its customers to pay into its other business accounts.


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.”

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