‘Debt traps’: SECP removes 120 illegal loan apps from Google, Apple stores

The Securities and Exchange Commission of Pakistan (SECP) has removed 120 illegal personal loan apps from Google and Apple stores in a bid to protect the public from debt traps and data breaches, the 24NewsHD TV channel reported on Friday.  

The SECP in a state said it had identified and reported the unlawful apps to Google, Apple, and the Pakistan Telecommunication Authority (PTA) for blocking, and referred them to the Federal Investigation Agency (FIA) for further action under the Prevention of Electronic Crimes Act of 2016.

The government has been cracking down on loan apps involved in extorting money through threats and blackmail since July when the death by suicide of a 40-year-old man from Rawalpindi made headlines in the country. The man was unable to return the money he borrowed from loan apps, with his wife telling police threats and blackmail compelled her husband to take his life.

The SECP said it had also tightened its regulatory framework for licensed non-banking finance companies (NBFCs) that provide loans through apps and initiated inspections to verify their compliance with disclosure, privacy, and recovery rules.

The move comes after a surge in complaints about illegal personal loan apps that charge exorbitant interest rates, misuse borrowers’ personal data, and harass them for repayments.

“As a result of SECP’s efforts and continuous engagement, Google has introduced Pakistan’s Personal Loan App Policy, according to which Google only allows SECP-approved Personal Loan Apps for placement on its Google Play Store,” the SECP said in a statement.

The SECP advised borrowers to obtain loans only from licensed NBFCs and to file complaints against illegal loan apps or investment schemes at its dedicated portal.