Google moves to tighten noose on predatory loan apps
April 10, 2023166 views0 comments
By Olivia Nnorom
Google has announced its plan to roll out a regulatory policy on its Play Store platform to restrict registered loan apps from gaining access to sensitive personal user data including photos, videos, and mobile contacts.
Loan apps, which used to be a resort to many individuals and growing businesses have gradually become a cause of concern , given rising reports of predatory practices such as misuse of personal data to harass and intimidating borrowers into paying outstanding debts, which often come with huge interest rates.
To address these predatory behaviours, Google said: “We’re updating our personal loans policy to state that apps aiming to provide or facilitate personal loans may not access user contacts or photos.”
According to Google, the policy is expected to go into effect on May 31, and it would be rolled out in markets hardest hit by the practice, including India, Kenya, Indonesia, Nigeria, and the Philippines.
The multinational technology company said it will also require country-specific licensing documentation to prove their ability to provide or facilitate personal loans.
Prior to the notice, Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) gave approval for 173 digital lending applications to operate in the country, where 119 have full approvals, while the other 54 have conditional approvals. It also stated that companies without approval will not be allowed to operate in the digital lending space.
Analysts said the developments are especially important in Nigeria, where many of these loan sharks charge as high as 50 per cent to 80 per cent on returns with extremely strict repayment timeliness.
Failure to pay attracts several social consequences with practices including threats, manipulated obituaries, physical harassment, and haggling of family members applied by these finance loan sharks after debtors fail to repay their loans.
By accessing borrowers’ personal contacts and their personal images, debt collectors have messages and manipulated photos sent to friends and family of these debtors.