Kenya’s Office of the Data Protection Commission (ODPC) said it was investigating public complaints made against digital lenders concerning how they processed users’ data.
In a statement shared on its Twitter handle, the office indicated that out of 299 complaints it admitted, 54% were against the digital lenders. Overall, Kenyans sent over 1,000 complaints concerning data abuse.
PRESS RELEASE: ODPC to audit 40 Digital Credit Providers and issues enforcement notice against a health service provider. pic.twitter.com/fLIbzRVGeG
— OFFICE OF THE DATA PROTECTION COMMISSIONER (@ODPC_KE) October 5, 2022
Among the 40 firms are Branch and Tala. The Data Protection Office has instructed the firms to avail certain documents or risk legal action.
“The Data Protection (Complaints Handling and Enforcement Procedures Regulations 2021) took effect on February 2022 paving the way for data subjects to file complaints and report data breaches to the Data Commissioner,” the statement added.
The authority, which was set up in November 2020, is mandated with conducting assessments for the purpose of ascertaining whether personal data is processed in accordance with Kenya’s laws.
The action by the Data Protection Office comes as the Central Bank of Kenya (CBK) continues to process applications for operating licenses sent in by 288 applicants, as it effects a mandate to regulate the country’s digital lending sector, which the Governor, Patrick Njoroge, has said started out as the ‘Wild West.’
In March 2022, the bank published fresh regulations requiring all digital lenders to apply for licenses within 6 months, which elapsed in September 2022. According to the Bank, only 10 firms are now licensed after completing the approval process.
The bank was granted the legal mandate to govern the sector in December 2021 following concerns from the public about poor practices from digital lenders.
Some of the practices that irked Kenyans include:
- High-interest rates
- Over-indebtedness
- Unethical collection practices
- Personal data abuse
In one of the more harrowing habits, Kenyans have complained of some lending apps using their phone contacts to reach out to family and friends asking a defaulter’s contacts to remind him or her to pay their loans.
___________________________
Follow us on Twitter for the latest posts and updates
Join and interact with our Telegram community
___________________________
___________________________
