Blocking BVN from Loan Apps

Loan apps have become quite popular in Nigeria as sources of quick loans for many. However, their practices have also received criticism due to privacy invasion and harassment of defaulters.

A commonly asked question is regarding blocking one’s Bank Verification Number (BVN) from these lending platforms. In this detailed blog post, we explore this issue and provide useful insights.

Why Borrow from Loan Apps?

Nigerians take loans from digital lenders for various urgent needs like bill payments, business capital, medical funds, and more. Key reasons include:

• Instant approval within minutes compared to banks requiring collateral.
• Convenient mobile app-based application process without paperwork.
• Flexible repayment tenors ranging from 1-6 months depending on loan amount.

However, many are not aware of the risks involved especially regarding data privacy and collection practices post-default. Let’s understand those aspects now.

Can You Really Block a BVN?

When harassed by aggressive loan recovery agents, debtors commonly inquire about blocking the BVN shared during the lending process. The truth is that directly blocking a BVN is not possible for the following reasons:

• BVN acts as a lifelong identification number issued by CBN to uniquely identify an individual.
• No individual has the authority to block another person’s BVN as it is maintained by banks in central databases.
• Even if removed from one app, loan companies can still access BVN details from other linked financial records.
• At best, banks may blacklist tagged BVNs involved in fraudulent activities based on internal risk policies.

So in summary, individuals have no means to directly block their BVNs online or restrict access selectively to only certain entities. It is an identity credential maintained at a systemic level.

Then What Can Be Done?

While direct BVN blocking is not feasible, there are some steps debtors can try to protect themselves:

• Delete Loan App & Reset Phone: Wiping all app data and resetting the phone removes stored BVN details from that specific device.
• Close Linked Bank Account: If the debt was deducted from a linked account, close it through the bank servers that direct access path for recoveries.
• Update Contact & Banking Details: Ensures any previously shared information like phone numbers or account numbers are not used again for reaching out.
• File Complaints: Credible regulatory bodies like CECB, NBFC association, or even police aid in addressing coercive collection practices.
• Blacklist Marketers: Blocking individual recovery phone numbers helps avoid direct harassment calls/texts on that number.

However, the only foolproof solution remains repaying loans on time to avoid complications in the first place. Let’s explore the risks of not doing so.

Risks of Defaulting

Taking loans without inspecting lender credibility or assessing one’s ability to repay on time is where problems start:

• Coercive Debt Collection: Aggressive calling/texting at odd hours, insults, doxing to contacts, and threats of legal action increase mental stress.
• Overpayments Via Unauthorized Deductions: Without consent, multiple deduction attempts can overdraw linked accounts levying penalties.
• Access to Private Data: Fine print consent shared contacts, call logs, and messages risk privacy and relationships if misused during recovery.
• Escalations & Blacklisting: Default details reported to credit bureaus can impair future creditworthiness and loan/bank account openings.
• Legal Implications: While unlikely, non-repayment if substantiated can theoretically attract legal fines according to contract terms.

So responsible borrowing and timely repayment minimizes risks. But what if a BVN is already compromised to a lender?

What To Do If Your BVN is Out

In case one’s BVN is mistakenly or non-consensually already shared with a loan provider, here are some steps:

• Contact Lender Immediately: Clarify how BVN was obtained and have them delete all such records as per privacy laws.
• Freeze Bank Accounts: Place restrictions on accounts to block any unauthorized loan deductions or transfers by lender.
• File Complaints: Lodge grievances with CBN, lending outfit directly and file police reports about non-consensual BVN usage.
• Monitor Statements: Carefully go through bank statements for suspicious deductions and report discrepancies promptly.
• Alert Banks: Share BVN misuse details with issuer bank branches to watch out for likely fraud attempts from that lender.
• Consider Replacement: As a last resort, initiate the BVN replacement process after exhausting the above steps and having a valid use-case approved.

Following due process and protecting oneself proactively is important if compromised ahead of actual repayment complications.

Dealing with Aggressive Collection

Many agree loan apps go overboard in chasing defaults through vulgar threats, insults, and doxing. Below are some tips to deal with this situation professionally:

• Remain Calm: Do not react angrily or use similar language which can worsen matters and invite personal legal issues.
• Record Evidence: Silently note dates and contents of communication, names used, etc. as potential proof for further action.
• Reject Contact: Clearly communicate not to be contacted anymore and stop engaging with such agents.
• File Complaints: Lodge official grievances with regulators, consumer forums, police, and cyber cells against the particular agent.
• Negotiate: Propose a workable repayment plan through authorized channels instead of individual agents.
• Consult Experts: Approach debt counselors or community organizations to understand legal options and handle issues responsibly.
• Document Defensively: Any correspondence establishes one’s innocence and intention to repay respectfully without coercion.

While it is understandable to feel hassled, keeping composure and following proper processes is smarter than reacting based on emotion in these situations.

Regulatory Guidelines for Lenders

With rising public discourse around unregulated digital lending practices, government bodies have stepped up with interventions:

• CBN guidelines direct all lending companies to register and obtain requisite approvals. Non-compliant entities face a shutdown.
• Data privacy and protection laws restrict unauthorized collection or misuse of personal customer information like contacts and locations.
• Consumer protection laws bar coercive collection practices, harassment, shaming, or privacy invasion of defaulters.
• Credit reporting guidelines streamline reporting of positive and negative credit records to licensed Credit Bureaus only.
• Industry bodies like FisspaN prescribe a code of conduct around responsible, transparent, and ethical operations.

While regulatory teething issues persist, increased oversight intends to improve customer experience outcomes in the long run. Individual due diligence also plays a big role.

Conclusion

To conclude, directly blocking one’s Bank Verification Number from loan apps or lenders is not practically possible under the current framework. Individuals however have alternative recourse mechanisms through appropriate legal routes and by preemptively protecting their data credentials. Upholding repayment commitments as per agreed terms also ensures a hassle-free experience. With growing regulatory interventions, the digital lending space in Nigeria is evolving towards balanced customer-centric best practices over time.