Is it legal for lenders to slander loan defaulters

In the lending industry, there are concerns about legal and ethical boundaries regarding loans. These concerns arise when borrowers are don’t make timely payments of their loan.

In Nigeria today, numerous lenders have maligned individuals who defaulted on personal loans, going beyond the usual reports to the credit bureau.***

Lenders should not engage in such unethical actions, but when they do, they often escape accountability because borrowers are unaware of their rights, including their repayment terms.

Today, we address the issue of lenders slandering loan defaulters, focusing on what borrowers themselves can do in such situations.

A lender with malicious intentions is likely to start throwing threats around in hopes of damaging your reputation. They may go as far as carrying out these threats; sending derogatory messages to your phone contacts, unsavory posts about you on social media platforms. etc

If you ever find yourself in such a dilemma, here’s what you should do: meticulously record all derogatory messages (or images) sent to you or posted online by any means. This includes details like loan amounts, credit scores, and credit reports if relevant. Capture them as a screenshot or screen record, but make sure to have it stored. This will serve as your evidence in case the situation escalates further.

Revisit the loan terms and agreement, and read it thoroughly. Carefully examine the fine print for any hidden details that might allow the lender to commit slander.

Check for any clause related to communication and dispute resolution, this can help create a strategy on how you can approach the lender with complaints about their ill-treatment.

Now that you’ve read the fine print, you are armed with everything you need to confront the lender and control the situation. Note that control does not equal aggressiveness. Going at your lender aggressively would only mean they’d reciprocate with the same energy.

Address the issue calmly. Seek clarification on their reasoning for posting derogatory content or the agreement terms allowing such actions. Request for the removal of all derogatory content and rebuttal of all slanderous statements.

Working things out with the lender does not make the issue settled, contrary to popular belief. Regardless of a resolved issue, we strongly advise that you report the lender to the proper regulatory bodies (credit bureaus, FCCPC***) overseeing financial institutions especially if the lender’s actions go against industry standards as they may continue to carry out the acts with other unsuspecting borrowers. Be your brother’s keepers.

Consult legal advice to understand your rights as a borrower***; this can help you build a solid case of slander against the unethical lender. Even if the lender repents, your reputation has already been tarnished, and slander can negatively impact various aspects of your life.

While lenders have the right to report defaulters to credit bureaus, slanderous actions are not legal. Upholding legal and ethical standards in debt collection is very important, if at any time you feel violated by a lender’s actions don’t hesitate to follow the steps above and see redress.

As always, you’re safe with Irorun as your ethical lender. Send us a message now at support@irorun.com and let’s get you started with the right loan.