How to Stop Loan Apps from Accessing Your Bank Account: A Comprehensive Guide
When you download and apply for a loan via a mobile app, you may be asked to provide sensitive information, including your bank account details. These apps need access to your account to disburse the loan and, in some cases, to automatically deduct repayments. Although this makes repayment easier, issues arise when unauthorized withdrawals are made or when the loan app continues to charge after the loan has been fully repaid.
Many borrowers aren’t fully aware of the risks involved in giving these apps permission to access their bank accounts. The key to stopping them lies in controlling how much access they have.
How Loan Apps Gain Access to Your Bank Account
Loan apps typically access your bank account in the following ways:
- Direct Debit Mandate: When you sign up for a loan, the app may request authorization to set up an automatic debit from your account on specific dates for repayment.
- Bank Verification Number (BVN): In some countries like Nigeria, loan apps may request your BVN to verify your identity, which also gives them access to your bank details.
- Access to SMS and Contacts: Some loan apps use the SMS on your phone to track your bank transactions and gain insights into your financial behavior.
These permissions are granted when you accept the terms and conditions of the loan app, sometimes without realizing the extent of their reach.
Why You Should Limit Access to Your Bank Account
Here are some reasons why you should consider limiting a loan app’s access to your account:
- Unauthorized Deductions: Loan apps may continue to deduct funds even after the loan is fully repaid, or they may take more than what is due.
- Data Privacy Risks: Loan apps may misuse your bank details, putting your financial security at risk.
- Unethical Practices: Some loan apps employ aggressive recovery methods, including taking out more than what’s owed or sharing your sensitive information with third parties.
- Control Over Finances: You should always maintain control over who can debit your account and when.
Steps to Stop Loan Apps from Accessing Your Bank Account
If you want to prevent loan apps from accessing your bank account, follow these steps:
a) Revoke Direct Debit Mandates
A direct debit mandate allows a company to withdraw money from your account on scheduled dates. If you no longer want the loan app to deduct funds automatically, you need to revoke this mandate.
- How to do it: Contact your bank (either through online banking, by visiting the branch, or calling customer service) and request to cancel or revoke the direct debit mandate associated with the loan app.
- Important: You should provide your bank with the mandate number or the loan app’s name.
b) Update Your Banking Details
In cases where revoking the direct debit mandate does not stop the deductions, you may need to update or change your bank account details.
- How to do it: Open a new bank account and transfer your funds to it. Avoid providing the new account information to the loan app.
- Consider using: Digital wallets or payment platforms for future transactions with loan apps to avoid direct access to your primary bank account.
c) Uninstall the Loan App
If the loan app is still installed on your phone, it could be monitoring your activities, accessing your messages, and even tracking your bank transactions.
- How to do it: Go to your phone’s settings, locate the app, and uninstall it. This will prevent the app from accessing your messages and data in the future.
d) Contact Your Bank
Even after revoking a direct debit mandate, if you still notice unauthorized deductions, you should immediately report the issue to your bank.
- How to do it: Provide evidence of the unauthorized deductions and request that your bank block all further transactions from the loan app.
e) Use Virtual Accounts or Wallets
Some financial platforms allow users to create virtual accounts that you can link to loan apps instead of your primary account. This adds an extra layer of protection, as the virtual account will only hold limited funds.
- How to do it: Sign up for a virtual bank account or e-wallet, transfer only the necessary funds to this account, and link it to the loan app instead of your main account.
f) Manage App Permissions on Your Phone
Loan apps often ask for access to your contacts, messages, and other personal information. If you’ve already granted these permissions, you can revoke them.
- How to do it:
- On Android: Go to “Settings” > “Apps” > [App Name] > “Permissions” and turn off any access to sensitive information.
- On iOS: Go to “Settings” > “Privacy” > “Permissions” and disable the loan app’s access to your phone’s data.
How to Report Unauthorized Access or Fraud
If you suspect a loan app has fraudulently accessed your bank account or is involved in unethical practices, you should:
- File a report with your bank: Banks can block future deductions and assist in recovering any unauthorized withdrawals.
- Contact the app’s customer service: Request them to stop debiting your account and provide proof of loan repayment if needed.
- Report to regulatory bodies: In many countries, there are consumer protection agencies and financial regulators that oversee loan app activities.
Tips to Safeguard Your Bank Account from Future Risks
Here are some additional tips to keep your financial data secure:
- Avoid sharing sensitive information like your BVN or bank details with any untrusted loan app.
- Read the terms and conditions carefully before agreeing to any loan to understand how the app intends to use your information.
- Use a secondary or digital wallet to limit access to your primary account.
- Regularly monitor your bank account for any unusual or unauthorized transactions.
Conclusion: Take Control of Your Financial Security
Loan apps can provide a quick financial fix but at the cost of your privacy and financial security. By understanding how these apps access your bank account and taking steps to limit this access, you can protect yourself from unauthorized deductions and potential fraud. Revoke permissions, update your account details, and always be cautious when dealing with loan apps. Your financial security is in your hands, and it’s essential to be proactive in safeguarding your data.
By following the steps outlined in this guide, you can regain control over your finances and stop loan apps from accessing your bank account without your consent