PTA blocks 43 lending apps after man’s suicide
ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has blocked 43 digital lending apps operating without a licence, the IT ministry said on Monday.
The apps have been under criticism for their predatory lending practices after a Rawalpindi man killed himself due to “threats” from loan apps, for failing to pay back debt, which had compounded to Rs800,000 after interest.
The PTA acted against the apps after directives were issued by the Federal Minister for IT and Telecommunication Syed Aminul Haque.
In the statement, the ministry said directions were issued to PTA Chairman retired Maj Gen Hafeezur Rehman to act against illegal loan apps.
Mr Haque said “strict action” has been started against these apps which are “blackmailing the masses”.
IT minister urges victims to register complaints
He added there was a “dire need” to launch awareness campaigns so that people do not fall victim to the blackmailing of loan apps.
He urged the victims to register complaints against these apps with PTA, FIA and local police.
The minister has also contacted the FIA director general who briefed him on the action against these apps, according to the statement.
The subject of digital lending apps falls under the jurisdiction of the Securities and Exchange Commission of Pakistan (SECP) which registers them, whereas blocking them was the purview of the State Bank and PTA.
“The SECP has been able to block 86 illegal apps in a year with the help of Google as they are downloaded from the PlayStore,” a senior SECP official said, adding that these apps restart their business with a new name soon after being banished.
These apps also carry out extensive advertising on social media and digital platforms, allowing them to lure more unsuspecting customers.
According to FIA officials, the cybercrime wings deal with the complaints of predatory lending apps. But the department is unable to actively act on such complaints as it is already overburdened with a backlog of cases.
Currently, the FIA was investigating all legal and illegal loan apps in the wake of Mahmood Masood’s death. Last week, nine people were arrested from an office of the loan company in Rawalpindi.
A senior FIA official told Dawn the deceased had not only taken loans from lending apps but also from relatives and friends. A meeting of the SECP and FIA officials was also held on Monday to streamline digital lending. It was decided that a mechanism will be devised to stop disbursements by unlicensed apps.
Published in Dawn, July 18th, 2023