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 Pakistan Telecommunication Authority (PTA), has ensured the removal of 120 illegal loan apps that were previously available on Google Play and Apple’s App Store.

In its statement, the SECP said that 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.

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 Federal Investigation Agency (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, it added.

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.

SECP said that personal loan borrowers should obtain loans only from licensed NBFCs. The SECP’s regulatory framework for approved apps requires transparent disclosure of fees, loan duration, installments, and charges. Moreover, 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, SECP has asked the public to file complaints at SECP’s dedicated complaint portal. The public can also report illegal loan applications or illegal investment schemes at SECP’s complaint portal.

Source: Pro Pakistani