How loan app debt collectors work
Loan app debt collectors in Nigeria have continued to shame defaulting borrowers against the country’s cyber laws, while loan app companies charge borrowers high interest rates.
Digital lending apps trick borrowers by posting lower interest rates on the Google Play Store but borrowers saw their loan terms increase as loan applications raised interest rates by more than 50%.
Interest rates can be as high as 75 to 395% per year.
Consumer Protection, Police, raid Gocash, Okash, Easy moni, other loan shark companies in Lagos
Illegal loan apps ignore Nigerian cyber laws and continue to shame customers
How fintech loan sharks in Nigeria bully cyber bullies, trap customers in debt
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Surveys by CIRI show that LCredit, 9credit, LionCash, Nkash, ForNaira, CycleCash, Cashrain, Mikoloan, Supercash, Xcredit, ICoin, PalmCredit and CashLion are some of the lending apps involved in the deception scheme.
Lending applications on the Google Play Store who offer short-term loans are mandated by Google policy rules to give borrowers at least 60 days from the date of issue to repay any loan.
Loan collectors have declared defaulters dead, calling and circulating defamatory messages to family and friends.
Here’s how the debt collector works.
A debt collector identified as Tobilola who works for LCredit with first-hand knowledge of their operations said CIRI that recovery agents are divided into five teams with a team leader assigned to each.
Teams are led by a team leader who assigns clients to debt collectors based on how long they have defaulted on their loans.
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“We are divided into five groups. Most debt collectors prefer first to third shift because they focus on short-term delinquent loans, which are easier to collect than long-term loans.
“We’re assigned 400 customers a week to each collection agent in the call center, and they don’t care what you do to collect delinquent loans from customers,” he said.
There is no official figure on how many loan companies exist in Nigeria; however, debt collection is an essential part of their operations.
Agents receive a weekly bonus of three percent of the total amount they collect if they reach their weekly goal.
The monthly salary of a debt collection agent at LCredit is N50,000, while the top three performers of the week receive between N10,000 and N15,000 as an incentive.
He said customers who defaulted on their loans often asked for more time to escape the constant harassment, but would still carry on with the debt collector’s eyes on the bonus.
“Team leaders always threaten to fire us if we don’t achieve the goal, and when they verbally insult us, we tend to transfer the aggression onto the customers using any means possible to recover the company money,” he said.
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On a public group On Facebook, loan application client Victoria Eyo Ekpo revealed that she was also bullied by a loan application agent and vowed not to repay the loan.
She borrowed the sum of N15,000 from Deloan and had defaulted on her repayment plan and the next thing she saw was a circulation of her obituary photo.
“This is what Deloan (app) sent me. I will never pay. They called my mum and insulted her. God help us,” she said.
There are no guidelines on the training of loan collectors and the methods they can adopt for collection.