The Ministry of Information Technology and Telecommunication (MoITT) is making strides in battling the plague of illegal loan apps sweeping across the nation by blocking 43 of such apps. Federal Minister for IT and Telecommunication, Syed Amin Ul Haque, emphasized the prompt action taken by the ministry and underlined the need for an awareness initiative to help citizens evade these fraudulent schemes.
Reporting Illicit Loan Apps
Those who encounter these illegal applications are urged to lodge complaints with the proper authorities, namely the Pakistan Telecommunication Authority (PTA), Federal Investigation Agency (FIA) Cybercrime, and local law enforcement. The aim is to ensure decisive action against these unlawful loan apps. The MoITT disclosed that the IT Minister has communicated with the FIA, advising them to proactively combat these issues, rather than solely reacting to complaints.
Increased Scams Amidst Rising Use of Personal Finance Apps
In recent times, there has been a surge in “easy loan” applications on popular digital marketplaces such as Google Playstore and Apple iStore. Notwithstanding the convenience these apps seem to offer, they have proven detrimental to many unsuspecting individuals. One recent incident involving the suicide of an unemployed man in Rawalpindi shone a spotlight on these deceptive practices.
Pakistan has observed a sharp increase in the use of personal finance apps, with user numbers more than doubling to 19% in 2022 from two years prior. This rise, however, attributes to an increase in scams and fraudulent activities as warned by digital rights and consumer defense groups. A recent survey by Karandaaz Pakistan, a nonprofit organization, revealed that this trend has improved the country’s financial inclusion rate.
Action Against Illegal Loaning Companies
The FIA has been actively targeting illegal loaning companies, launching operations across the country. Seventy-four cases are currently under inquiry, instigated by complaints from affected individuals. Furthermore, three First Information Reports (FIRs) have been lodged against those implicated. With 17 suspects arrested, 30 accounts blocked, and five offices of companies involved in this illegal activity sealed, the FIA’s cybercrime wing is making significant headway.
FIA Director General, Mohsin Hassan Butt, has instructed all field units of the cybercrime wing to take severe action against firms and individuals offering loans via unregistered and illegal mobile applications. He emphasized that such companies must obtain licenses from the Securities and Exchange Commission of Pakistan (SECP) for online loan payment apps. According to the Director General, the SECP is the registering and regulatory authority tasked with licensing non-banking financial companies (NBFCs) for loan provision via online apps.
PTA’s Role in Thwarting Illegal Micro-Financing
Additionally, the Pakistan Telecommunication Authority (PTA) is collaborating with Apple and Google to eradicate illegal apps involved in micro-financing in Pakistan. As the crackdown continues country-wide, citizens are advised to verify the SECP website to confirm the legitimacy of a company’s app prior to using.
