Loan Apps in Pakistan Charging Up to 1800% & Spying on Your Data
Many instant loan apps are trending in Pakistan, but behind quick loan promises there is a dark truth. Some of these apps are charging up to 1800% interest and also accessing your personal data, gallery, and contacts.
This was revealed in a meeting of the Senate IT Committee, led by Senator Palwasha Khan, where officials from the National Cyber Crimes Investigation Agency (NCCIA) informed lawmakers about the worrying increase in online fraud.
This was revealed in a meeting of the Senate IT Committee, led by Senator Palwasha Khan, where the officials of the National Cyber Crime Investigation Agency (NCCIA) informed lawmakers about the increase in online fraud.
It was shared that people borrowed as little as Rs. 5,000 for their basic needs, but these people were trapped in debt because of unfair loan practices.
The Securities and Exchange Commission of Pakistan (SECP), which licensed these companies in 2020 without stringent conditions, has since revised regulations by capping interest rates at 100% and prohibiting apps from accessing users’ personal data.
The Securities and Exchange Commission of Pakistan (SECP) had licensed these companies in 2020 without strict rules. Later, it updated the rules by setting a 100% cap on interest rates and also banning loan apps from accessing users’ personal data.
The authorities also confirmed that more than 90% of fraudulent loan apps have been banned.
The problem, however, extends beyond mobile apps. The SECP warned earlier this year about scams on social media platforms such as Facebook, where ads falsely promise “interest-free” loans using the names of reputable organizations to appear legitimate.
The issue is going beyond mobile apps. Earlier, the SECP had warned about scams on social media, especially Facebook, to not show ads that claim to offer interest-free loans. These apps are promoted by using the names of well-known organizations.
Victims are trapped into paying fees for things like processing, insurance, or verification, and giving their personal information. After that, the scammers disappear without giving loans.
FAQs
Q1: Why do loan apps need access to contacts and gallery?
Loan apps need access to contacts and gallery for blackmailing users for payment.
Q2: Are all loan apps scams?
Not all loan apps are scams. Trust only those which are approved by the State Bank.
Q3: What to do if an app blackmails me?
In that case, complain to FIA Cybercrime Pakistan.
Q4: How to check if a loan app is legal?
To check which loan apps are legal, visit the State Bank of Pakistan website for the list of licensed apps.
Loan apps promising quick cash may look helpful, but in reality, many of these loan apps are traps. With 1800% interest rates, these apps have pushed people into traps and harassment.