Mohammad Masood, an unemployed resident of Rawalpindi, committed suicide earlier this week after receiving constant threats from online loan applications for not repaying a debt of Rs800,000. To pay for his children’s tuition, house rent, and his previous debt, he obtained two different loans from the apps. The tragic event serves as yet another reminder of the overwhelming pressure that millions of Pakistanis experience due to rising inflation and a lack of governmental welfare.
Online loan apps have become a popular way for struggling people to access quick and easy cash. However, not all of these apps are legitimate and some of them are involved in a scam that exploits and harasses customers.
According to reports, some of these apps charge exorbitant interest rates, up to 40% or more for 15 days, and do not disclose the terms and conditions clearly. They also access personal data from the users’ phones, such as contacts, messages, photos, and location, and use them to blackmail and threaten them if they fail to repay the loan on time.
Some of these apps have also been accused of stealing user data and selling it to third parties, exposing customers to identity theft and fraud. The Federal Investigation Agency (FIA) has launched a crackdown against these apps after Mohammad Masood’s suicide due to harassment from online loan sharks.
The Securities and Exchange Commission of Pakistan (SECP) has repeatedly warned the digital lending industry to ensure full disclosure and fair business practices, or face regulatory intervention. The SECP has provided a list of fake loan apps in Pakistan that are illegal and should be avoided by the public. The government has also advised people to be careful when downloading loan apps and to verify their authenticity before sharing any personal or financial information.
While cybercrime is a serious problem in Pakistan, as it is across the rest of the world, an increasing number of Pakistanis are being forced to turn to loan sharks in order to survive. This reality highlights the people’ growing helplessness and desperation as they struggle to put food on the table. People need assistance in the form of jobs, decent pay, and lower commodity prices. If not, we will continue to see vulnerable people being taken advantage of.
