In a proactive move to safeguard consumers from fraudulent practices, Google has taken a significant step by banning unregistered and fake loan-providing applications operating in Pakistan. The decision was made at the request of the Securities and Exchange Commission of Pakistan (SECP) in response to the alarming proliferation of these deceitful apps.
Credible sources from the SECP reveal that Google will enforce the ban on these questionable loan apps on July 31, 2023. This decision comes as authorities grapple with an increasing number of complaints and reports of distressing suicide cases linked to these exploitative apps.
Organised rackets have been targeting inflation-hit individuals through social media platforms, resorting to blackmail to extort money from vulnerable victims. Despite previous measures taken against over 43 illegal loan apps, the problem persisted, prompting the Cyber Crime Wing of the Federal Investigation Agency (FIA) to intensify its efforts.
The tragic suicide of Muhammad Masood, a 42-year-old man from Rawalpindi, who fell prey to these manipulative loan apps, added urgency to the situation.
The SECP has responded by issuing advice to borrowers, urging them to carefully review the legal status of digital loan applications before signing up. Thoroughly reading and evaluating all disclosures related to fees, late payment charges, loan tenor, cooling-off period, and the privacy policy of these applications is crucial to avoiding potential exploitation, says the SECP.
To facilitate the process of reporting and addressing complaints, the SECP has established a dedicated complaint portal on its website.
It is worth noting that the SECP has been actively collaborating with various regulatory bodies, including the PTA, FIA’s Cyber Crime Wing, and the SBP, to tackle the issue of unlicensed digital lending apps operating illegally in the country, an SECP official told The Express Tribune.
The collaborative efforts led to the issuance of a circular by the SBP in June 2022, denying access to illegal apps to banking/payment channels. The SECP, as the regulator of Non-Banking Finance Companies (NBFCs) digital apps, has been actively involved in ensuring effective action against these illegal apps.
The SECP successfully influenced the tech giant’s Personal Loan App Policy for Pakistan. This policy imposes strict checks and balances to prevent the listing of illegal apps on the Play Store and sets stringent requirements to safeguard consumers’ personal data.
As part of this initiative, Google has already removed 84 illegal lending apps reported by the SECP from its Play Store.
Published in The Express Tribune, July 28th, 2023.
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