Debt Shaming: Kenyan Loan App Slapped With $3,700 Fine

Mobile phone user. Debt Shaming: Kenyan Loan App Slapped With $3,700 Fine (News Central TV)

Kenyan authorities have fined an online lender $3,700 for allegedly debt shaming customers by intruiding and distributing their personal information. It came as a result of user complaints about personal data breaches by the loan app.

According to the Office of Data Protection, it received over 150 complaints about Whitepath Ltd, saying that the lender’s mobile application mined phone contacts data to engage in debt shaming practises. The lender’s employees were also accused of harassing the complainants and their relatives and family members via phone calls gathered illegally.

Mobile phone user reads terrifying loan application message.

Debt Shaming Kenyan Loan App Slapped With $3,700 Fine (News Central TV)
Mobile phone user reading a terrifying debt shaming message from a loan company.

Regus Kenya, a company that sells office space, was also fined a similar amount after being accused of spamming complainants despite efforts to stop them.

Simultaneously, the office issued an enforcement notice to another company, Ecological Industries Limited, for failing to cooperate with repeated notices of a complaint filed in January 2023. The case was filed against the corporation for marketing objectives by publishing a personal photo in its catalogue and calendar.

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Addressing the wide debt shaming by loan applications, Immaculate Kassait, Kenya’s data commissioner, stated that data protection is the responsibility of every data controller and processor and it must be the company’s top priority whenever they collect, process or store personal information.

“I challenge businesses to protect personal data by design and by default and cooperate with the Office of Data Protection Commissioner to avoid penalties,” she said.

According to section 63 of the Data Protection Act, the maximum amount of penalty that may be imposed by the Commissioner in a notice is up to Sh5 million or in the case of an undertaking, up to one per cent of the company’s turnover of the preceding financial year.

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Access to credit has increased in Kenya as a result of the rise of digital lenders; nevertheless, customers and authorities allege that some of these lenders are engaging in predatory activities, such as publicly debt shaming borrowers.

Google will restrict loan apps from accessing sensitive user data to avoid debt shaming

To curb debt shaming and similar activities, Google recently announced efforts to limit the availability of loan apps on its Play Store to sensitive user data such as images, videos, and contacts. The change, which was made to the Personal Loans Policy and will go into effect on May 31st.

“Apps that provide personal loans, or have the primary purpose of facilitating access to personal loans (i.e., lead generators or facilitators), are prohibited from accessing sensitive data, such as photos and contacts,” the business stated in its update.

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The rise of undesirable actors paved the ground for the subsequent tight regulatory control. Google now allows only licenced apps to continue on its platform.

Google’s new measure adds another regulatory stroke that will help to manage the space’s operators and, perhaps, inflict a deadly blow to predatory lending and debt shaming in Africa.

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