A Nigerian startup launched their app. Built a clean OTP flow. No rate limiting on the SMS endpoint. Shipped it.
Within 48 hours, their Termii balance went from ₦150,000 to zero.
They woke up to failed OTP delivery complaints from real users.
Checked their logs.
Someone had been hitting their /send-otp endpoint in a loop with thousands of requests sending SMS to sequential phone numbers that were not even their users.
This is called SMS pumping fraud.
Here is how it works:
• Fraudsters find your open OTP endpoint
• They send requests to thousands of phone numbers, sometimes numbers they control on premium routes
• Every successful SMS costs you money
• They get a cut from the carrier. You get the bill.
It is automated. It runs while you sleep.
The fixes that would have stopped it entirely:
• Rate limit by IP: max 3 OTP requests per IP per hour
• Rate limit by phone number: max 3 requests per number per 10 minutes
• Add a minimum delay between requests
• Implement CAPTCHA or device fingerprinting on the frontend
• Alert yourself when SMS spend spikes above a threshold
None of this is complicated.
All of it takes less than a day to implement.
That startup lost ₦150,000 in two days and had to shut down OTP entirely while they fixed it.
Their users thought the app was broken.
Some never came back.
The breach was not dramatic.
No hacker. No sophisticated attack.
Just an open endpoint and a bot.
Secure your OTP flow before you launch.
Not after you've learned the hard way.
When you build a product that collects Nigerian user data and you have never heard of NDPR, I genuinely hope you don't find out about it through a lawsuit.
The Nigeria Data Protection Regulation requires:
• A real privacy policy users can actually read
• Explicit consent before collecting personal data
• Data minimization — only collect what you need
• Breach notification within 72 hours if user data is exposed
• A Data Protection Officer if you process data at scale
NITDA can fine you up to 2% of annual gross revenue or ₦10 million whichever is higher.
Most Nigerian devs have never heard of this.
They ship, collect BVNs, phone numbers, emails with zero compliance structure.
NDPR is not just a big company problem.
If you have users, you are responsible for their data.
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