40 digital lenders face hefty fines in data breach probe

Data regulator says move necessitated by numerous consumer complaints

Advanced AI solutions now enable growing fintechs to effectively detect money laundering and sanctions list violations

About 40 digital lenders in Kenya could pay huge penalties after the data regulator started probing complaints lodged by consumers.

Some of the lenders being investigated are Branch, Zenka, Tala, FairKash, Hela Credit, Kashway and KashPlus.  If found culpable, they face a fine of Sh5 million or up to one percent of their annual turnover.

The Data Protection Commissioner Immaculate Kassait said they have kicked off a preliminary audit on the digital lenders to determine if indeed they 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.

The firms have been accused of “debt shaming” tactics when collecting loans, including 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 is against sharing of data with third parties without consent. The law stipulates that individuals have 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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