Data regulator probes 40 digital lenders on breaches

Data Protection Commissioner Immaculate Kassait. FILE PHOTO | NMG

Upto 40 digital lenders are facing hefty penalties after the data regulator opened investigations following mounting complaints from consumers.

Branch, Zenka and Tala are among the digital lenders under probe and if found in breach, they face a fine of Sh5 million or up to one percent of their annual turnover.

The Data Protection Commissioner Immaculate Kassait said that a preliminary audit on the digital credit providers (DCPs) that also includes FairKash, Hela Credit, Kashway and KashPlus is under way to ascertain whether the lenders misused creditor’s data to their advantage.

The probe, the agency said, was opened following complaints over digital lenders who have breached the confidentiality of personal information.

“The office of the Data Protection Commission wishes to notify the public that it is conducting preliminary document assessment and audit on 40 Digital Credit Providers whose practices regarding the processing of personal data has been raised to the Data Commissioner as complaints by various members of the public,” said Ms Kassait yesterday.

The firms have been accused of resorting to “debt shaming” tactics to recover loans.

This includes the use of debt collection agents pursuing borrowers either by informing their friends and family or by threatening to tell their employers. The Data Protection Regulations, 2021 which took effect in February 2022 bars sharing of data with third parties without consent and gives individuals the right to be told when their data is being shared and for what purposes.

“As of September 30, 2022, ODPC had received 1030 complaints, the office admitted 555 of these cases including 299 which were on digital lending, representing 54 percent of all cases admitted,” Ms Kassait said.

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