ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has blocked 43 digital lending apps operating without a license, the IT ministry said.
Loan apps have faced criticism for predatory lending practices. The criticism stems from a tragic incident in Rawalpindi. A man took his own life after receiving threats from loan apps. The threats were related to an unpaid debt of Rs800,000 with accumulated interest.
In response, the Federal Minister for IT and Telecommunication issued directives. The directives were aimed at the Pakistan Telecommunication Authority (PTA). The PTA acted against these apps. The incident highlights the importance of consumer protection. It also emphasizes the need for transparent lending practices.
The ministry said, “Issue directions to PTA Chairman RTd Maj Gen Hafeezur Rehman to take action against illegal loan apps.”
“Strict action” has been started against these apps which are “blackmailing the masses”, said Mr. Haque. The IT minister is calling upon victims to file complaints and register their grievances.
The minister emphasized the urgent need for awareness programs to prevent people from falling victim to loan app blackmailing. He urged the victims to file complaints with the PTA, FIA, and local police.
According to the statement, the minister personally contacted the FIA director general, who briefed him on the actions taken against these apps.
The Securities and Exchange Commission of Pakistan (SECP) registers and controls digital lending apps. The State Bank and PTA have the authority to prohibit these apps.
According to a senior SECP official, with the assistance of Google, the SECP has successfully blocked 86 illegal apps within a year. These apps resurface under new names shortly after authorities take them down.
These apps use social media and digital platforms extensively for advertising, attracting unsuspecting customers.
FIA responds to the case
FIA officials handle complaints related to predatory lending apps in their cybercrime wings. However, due to an existing backlog of cases, the department is unable to take prompt action on these complaints.
In response to Mahmood Masood’s death, the FIA is currently investigating all legal and illegal loan apps. Last week, authorities arrested nine individuals from a loan company office in Rawalpindi.
According to a senior FIA official, the individual who passed away had borrowed money not only from lending apps but also from relatives and friends. SECP and FIA officials convened a meeting on Monday to streamline digital lending. During the meeting, the participants agreed to develop a mechanism that would prevent unlicensed apps from disbursing funds.
