Illegal Loan Apps: Govt Bans Dozens as Crackdown Finally Begins

The Ministry of IT and Telecom in Pakistan has taken a decisive step in response to numerous reports on the proliferation of illegal loan apps. Over 40 such apps have been banned, indicating the widespread nature of this issue.

In an official statement released on Monday, Federal Minister Aminul Haq directed Major General Hafeez-ur Rehman, the Chairman of the Pakistan Telecommunication Authority (PTA), to promptly address the matter.

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The statement confirmed that 43 applications had been blocked as an immediate response to the ministry’s instructions. Furthermore, the PTA has sought consultation and assistance from the Securities and Exchange Commission (SECP), as some of these companies are registered with them.

This action by the Ministry of IT and Telecom reflects their commitment to combating the problem of illegal loan apps and ensuring the safety and security of consumers in Pakistan.

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The Securities and Exchange Commission of Pakistan (SECP) has received 1,415 complaints against licensed digital lenders and 181 complaints against unlicensed ones as of May. These complaints indicate the alarming extent to which the lending mafia is exploiting and blackmailing unsuspecting individuals through platforms like Facebook and other social media channels.

In response to this situation, a statement has emphasized the need for an awareness campaign to educate consumers, ensuring they do not fall victim to these blackmail tactics employed by such entities. The statement further encourages individuals to file complaints regarding these applications with the Pakistan Telecommunication Authority (PTA), the Federal Investigation Agency (FIA) Cybercrime division, and the local police.

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It is evident that concerted efforts are being made to address this issue and protect the public from the fraudulent practices of illegal loan apps. Public participation, through filing complaints and raising awareness, is crucial in effectively combating this menace.

In May, the Competition Commission of Pakistan (CCP) issued a public warning regarding the increasing prevalence of mobile app-based micro-credit and nano-loan services. The commission initiated an inquiry into these illegal applications, as they observed that vulnerable consumers, particularly those from the lower and middle-income classes, had downloaded these apps more than 10 million times on their mobile devices across Pakistan.

Recognizing the potential harm caused by these apps, the CCP appealed to the general public to come forward and provide any information they had regarding these nano-loan mobile applications. This call for public cooperation aimed to gather valuable insights and evidence to aid in the investigation of these illegal operations.

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The CCP’s actions demonstrate their commitment to safeguarding consumer interests and ensuring a fair and competitive marketplace. By raising awareness and encouraging public engagement, the commission seeks to address the issue of unscrupulous nano-loan apps and protect vulnerable consumers from their potential exploitation.

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