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FG Steps Up Crackdown on Loan Sharks
The Federal Government has intensified investigations into the activities of so-called “sharp sharp” loan operators—also known as loan sharks—over alleged violations of customers’ data privacy and unethical debt recovery practices.
RELATED: FCCPC tightens noose on loan apps: Why non-enforcement puts Nigerian consumers at serious risk
The National Commissioner of the Nigeria Data Protection Commission (NDPC), Mr. Vincent Olatunji, disclosed this in an interview with the News Agency of Nigeria (NAN).
How ‘Sharp Sharp’ Loan Operators Violate Privacy
“Sharp sharp” loan operators are largely unregulated digital lenders that provide instant loans—often without collateral—through mobile apps and online platforms. According to Olatunji, many of these operators resort to abusive and unlawful practices in their efforts to recover loans.
He revealed that common violations include:
- Accessing borrowers’ phone contact lists without consent
- Contacting family members, friends, and colleagues to apply pressure
- Sharing personal images without authorization
- Sending defamatory, threatening, or harassing messages
Olatunji made the remarks on the sidelines of a training programme for Data Protection Officers (DPOs) in Abuja.
NDPC Warns Nigerians to Know Their Rights
The NDPC boss stressed the need for increased public awareness, urging Nigerians to understand their data privacy rights and carefully review loan agreements before accepting any offer.
“Many borrowers unknowingly expose their personal data because they fail to read loan agreements before accepting loans. This challenge is not peculiar to Nigeria; it is a global issue,” Olatunji said.
He added that the situation is worsened by the fact that many digital lenders operate exclusively online, without physical offices, making regulation more complex. Nonetheless, he emphasised that compliance with Nigeria’s data protection laws remains mandatory for all operators.
Inter-Agency Regulation of Digital Lenders
Olatunji noted that Nigeria has multiple consumer protection and regulatory bodies overseeing the digital lending ecosystem. These include the Federal Competition and Consumer Protection Commission (FCCPC), which leads consumer protection efforts, alongside the National Information Technology Development Agency (NITDA), Nigerian Communications Commission (NCC), the Central Bank of Nigeria (CBN), and the Nigeria Police Force.
According to him, any digital lender operating in Nigeria must obtain approval and licensing from the FCCPC, with strict obligations to respect users’ privacy and data protection rights.
2026 Enforcement Actions Against Illegal Loan Apps
In 2026, the Federal Government—through the FCCPC and NDPC—has significantly escalated enforcement actions against illegal loan operators to curb data abuse, extortionate interest rates, and harassment.
Key actions include:
Investigations and Prosecution
The NDPC is currently investigating over 400 reported cases of data privacy breaches, including unauthorized access to borrowers’ contact lists and the circulation of personal images without consent.
App Store Takedowns
The FCCPC has directed Google and Apple to remove apps belonging to unregistered and illegal lenders. Several loan apps have already been delisted from the Google Play Store.
Bank Account Freezing
Commercial banks have been ordered to freeze accounts linked to illegal loan operators, limiting their ability to continue operations.
New Regulations and Compliance Deadlines
Following the introduction of the Digital, Electronic, Online, and Non-Traditional Consumer Lending (DEON) Regulations in late 2025, the FCCPC granted operators a compliance window that closed in January 2026.
- Non-compliant lenders now face possible bans and fines of up to ₦100 million
- A final compliance extension for provisionally approved operators runs until April 2026
- Over 100 illegal loan apps are currently on the regulator’s watchlist
The government also maintains and updates a public list of approved digital lenders, urging Nigerians to avoid any operator not listed.
Government Advisory to Nigerians
The Federal Government has advised Nigerians to report any loan operator engaged in harassment, cyberbullying, defamation, or data misuse to the FCCPC and relevant authorities.
As digital lending expands, regulators warn that data privacy violations will attract tougher sanctions, reinforcing the message that consumer rights and personal data protection remain non-negotiable under Nigerian law.
