ISLAMABAD: In order to safeguard the public from falling into debt traps of illegal loan apps, the Securities and Exchange Commission of Pakistan (SECP), in coordination with Google, Apple and the PTA, has ensured removal of 120 illegal loan apps that were previously available at Google and Apple Stores.
The phenomenon of illegal personal loan apps has surfaced recently, raising serious concerns about mis-selling, data privacy violations, and coercive recovery practices.
The SECP not only tightened its regulatory framework for licensed Non-Banking Finance Companies (NBFCs) but also initiated effective steps with the relevant authorities to shut down unauthorized and illegal loan apps.
Govt launches crackdown on illegal loan apps
Through efficient surveillance and complaints received through the SECP’s dedicated complaint site, the regulator had identified 120 unlawfully running personal loan apps and reported them to Google, Apple and the PTA for prompt blocking and referred these to the FIA for further action in accordance with the Prevention of Electronic Crimes Act of 2016. SECP regularly checks the Google Play Store and the Apple App Store for the presence of any illegal apps.
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.
Personal loan borrowers are advised to obtain loans only from licensed NBFCs. The SECP’s regulatory framework for approved Apps requires transparent disclosure of fees, loan duration, instalments, and charges.
Moreover, the SECP has also initiated inspections of licensed NBFCs providing loans through Apps to verify that these are not engaged in miss-selling, breaches of data privacy, or coercive recovery practices etc.
In case of any complaints against licensed NBFCs, the general public is advised to file complaints at SECP’s dedicated complaint portal, https://sdms.secp.gov.pk/sdmsadmn/. People can also report illegal loan applications or illegal investment schemes at SECP’s complaint portal.
Copyright Business Recorder, 2023
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