Suicide, Fraud and Phillips Consulting: The Story Of West Africa’s Chinese Loan Shark Mafia

2023 Shortlist

Suicide, Fraud and Phillips Consulting: The Story Of West Africa’s Chinese Loan Shark Mafia

Entry type: Single project

Country/area: Nigeria

Publishing organisation: West Africa Weekly

Organisation size: Small

Publication date: 2022-05-30

Language: English

Authors: David Hundeyin

Biography:

David is a writer, investigative journalist and broadcaster whose work has appeared on CNN, The Africa Report, Al Jazeera and The Washington Post. His investigative journalism newsletter, _West_ _Africa_ _Weekly_, goes out to over 43,000 subscribers.

In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He won the 2020 People Journalism Prize for Africa and the GRC Anti-FinCrime Reporter of the Year award in both 2021 and 2022.

Project description:

In the light of the growth of illegal app-based loan sharking operations in Nigeria and West Africa, this story investigated the origins of these loan sharks and for the first time ever, revealed the personal and corporate identities of the key people and organisations involved in data theft, harassment, blackmail and financial fraud inherent in these operations.

Specifically, Soko Lending Company – a Chinese parent entity of several such loan app brands – was identified and tied to a physical location, as was Phillips Outsourcing, an otherwise respectable corporate consulting firm which was revealed to be an active collaborator.

Impact reached:

Following my story which was published on May 30, Nigeria’s National Data Protection Bureau (NDPB) announced on August 15 that it was carrying out an investigation into the activities of Phillips Outsourcing and an unnamed Nigerian Bank suspected of aiding online loan sharks.

Shortly after my story was published, Soko Lending Company was forced to abandon its newly acquired office space and go dark in the light of intense public scrutiny. It also scrubbed all its presence off social media, deactivating its Twitter and Facebook accounts.

In the week after the story was published, Ken who was mentioned at the outset, suddenly woke up to find his loan balance with Sokoloan mysteriously cleared, following months of harassment and defamation which had persisted up until that point.

Techniques/technologies used:

In verifying the information provided by the whistleblowers, I made extensive use of the semi-public Nigerian Inter Bank Settlement System (NIBSS) database, which contains the Bank Verification Number (BVN) details of all corporate and individual Nigerian bank customers.

By design or by accident, it is the case that when making an account to account transfer in Nigeria, one is able to pull up the name on an account by entering the account number into the bank app. This meant that using this functionality, which pulls data from the central NIBSS database, it was possible to independently verify the account details provided by the whistleblowers and thus produce solid evidence of a financial relationship between the illegal loan shark and Phillips Outsourcing.

This use of technology also provided empirical evidence that despite it being clearly against the law and regardless of prior denials by the banks involved, illegal online loan sharks also had access to formal banking services in Nigeria.

I also made extensive use of photo editing software to manually redact the sensitive financial information contained in the data samples and screen captures that I published, which were taken from the loan shark’s leaked internal customer data dump. This way, I was able to prove that Soko Lending Company was guilty of severe data privacy and data protection violations without exposing the affected customers to increased risk.

Context about the project:

The major constraint that made this story so challenging to work on was the sheer amount of time involved in cultivating sources and whistleblowers. I began working on this story back in July 2021, and it was not until April 2022 that I finally got my biggest breakthrough with a whistleblower. https://twitter.com/DavidHundeyin/status/1420316734913974272?t=20I_7uQKhj0X2_dHGgoQqQ&s=19

The reason for the long delay was the trust gap that exists between the Nigerian media and Nigerian audiences, who believe Nigerian journalists to be corrupt, compromised or mediocre. Only after sufficiently differentiating myself from the perceived mainstream with my work over the intervening 8 months did the most important whistleblowers begin to trust me enough to reach out with the key information.

What can other journalists learn from this project?

The major takeaway for other journalists working under similar circumstances is to do away with the expectation that investigative projects will necessarily produce the type and scope of results they generally expect. For example I certainly did not expect a respected mainstream corporate consultancy brand like Phillips Outsourcing to show up anywhere in this story, much less end up at the very centre of it, resulting in an unprecedented federal investigation, but that is exactly what happened.

After a few months of research and hunting for information, it might have been easier to accept defeat and turn in a significantly less impactful story centred on the human angle side of things. The problem is that such a story – focusing on the impact of the illegal actions of loan sharks on their victims – had already been done multiple times before, and would have resulted in little more than empty sympathy. Keeping the hook in the water until something that significantly progressed or elevated the conversation came up turned out to be the correct decision.