Man driven to suicide by predatory lending app, says family

Threats, blackmail as Rs13,000 loan turns into spiralling Rs1 million debt

RAWALPINDI:

A 42-year-old man took his own life in Rawalpindi after being unable to repay a loan he had taken from a predatory digital lender.

According to the complaint filed with the Race Course police station, Muhammad Masood borrowed Rs13,000 from one such online lender. He had taken the loan to cover for the school fee of his two children and his house rent, said the complaint filed by the victim’s brother Muhammad Muzzamil.

However, Masood did not realise that the amount had been lent at exorbitant rates. Within a couple of weeks, the amount owed was as high as Rs70,000

According to Masood’s widow, he lost his job around six months ago. He had been unable to find gainful employment and was facing difficulties to make ends meet. This is what made him turn to online lending apps.

During this time, he received threatening calls from the lender warning him of grim consequences.

In order to pay the first lender, he borrowed from another app. Soon, his dues were in excess of one million rupees.

The family said that the threats and blackmail drove him to suicide. He was found hanging at his home by the family. The complaint names the creators of the lending app as the accused.

Masood's brother added that the lenders were still threatening his family “even after Masood’s suicide”.

Masood's wife urged action against predatory lending apps that exploit people desperate for a short influx of funds.

Unscrupulous actors

Some of these lending apps have been known to use unscrupulous means, including getting access to the borrower’s contacts and photos. Such apps have been known to resort to blackmail or calling up people in the borrower’s contact list to harass them. Aside from that, they charge sky-high interest rates.

In May this year, Google updated its personal loans policy, particularly for Pakistan, to bar them from accessing users’ sensitive data such as photos and contacts.

“Personal loan apps in Pakistan must submit country-specific licensing documentation to prove their ability to provide or facilitate personal loans,” read the policy.

 

Published in The Express Tribune, July 12^th, 2023.