SokoLoan, an online money-lending platform, has been fined N10 million by the National Information Technology Development Agency (NITDA) for privacy invasion.
This was contained in a press statement titled ‘NITDA sanctions Soko Loan for privacy invasion’ issued by NITDA’s spokesperson, Hadiza Umar, on Tuesday.
This action was taken after receiving series of complaints against the company for "unauthorized disclosures, failure to protect customers’ personal data and defamation of character as well as carrying out the necessary due diligence as enshrined in the Nigeria Data Protection Regulation (NDPR)".
One of such complaints filed by Bloomgate Solicitors on behalf of its client, the data subject, was received on Monday, 11th November 2019. NITDA said as part of its due diligence process, it commenced investigation over the alleged infractions of the provisions of the NDPR.
NITDA said its investigations showed that 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 which grants the application 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,” the statement read in part.
Investigation revealed that complainants’ contacts who were neither parties to the loan transaction nor consented to the processing of their data have confirmed the receipt of such messages. The Agency said it made strident efforts to get Soko Loan to change the unethical practise 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 directs 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.
After its investigation, NITDA stated that it found Soko loans guilty of using non-conforming privacy notice, insufficient lawful basis for processing personal data, illegal data sharing without appropriate lawful basis, contrary to Nigeria Data Protection Regulation.
NITDA also said Soko loans was guilty of unwillingness to cooperate with the Data Protection Authority, contrary to Article 3.1 (1) of Data Protection Implementation Framework; and non-filing of NDPR Audit reports through a licensed Data Protection Compliance Organisation (DPCO), contrary to Article 4.1(7) of the NDPR.
Aside N10 million sanction, NITDA ordered that no further privacy-invading messages be sent to any Nigerian until the company and its entities show full compliance with the NDPR and directed Soko loan to pay for the conduct of a Data Protection Impact Assessment by a NITDA appointed DPCO on its operation.
The agency also placed a mandatory Information Technology and Data Protection oversight for 9 months on Soko loans.
The agency also disclosed that the criminal aspects of the investigation have been deposited with the Police to determine if the executives of the company are liable to imprisonment for violating Section 17 of the NITDA Act, 2007.