Digital Loan Sharks Trap Pakistanis via Apps & Scams
Pakistan Cracks Down on Predatory Loan Apps and Online Scams
Islamabad/Dubai: Pakistan is intensifying efforts to tackle predatory loan apps and digital scams that are exploiting vulnerable citizens. The Senate Standing Committee on IT and Telecommunications was briefed on alarming cases of online loan fraud, which continue to push Pakistanis deeper into financial distress.
According to the National Cyber Crimes Investigation Agency (NCCIA), some mobile loan apps charged interest rates as high as 1,800%, while misusing access to users’ phone galleries and contact lists to harass, threaten, and blackmail borrowers. Many victims borrowed as little as Rs5,000 for basic needs like food, only to get trapped in escalating debt cycles.
The Securities and Exchange Commission of Pakistan (SECP) initially licensed dozens of these companies in 2020 but has since tightened regulations, capping interest rates at 100% and banning apps from accessing personal data. While over 90% of fraudulent apps have been removed, scammers have now shifted to social media platforms like Facebook and TikTok, running ads for “instant loans” and disappearing after collecting upfront fees or sensitive information.
Earlier this year, SECP, with support from other agencies, shut down 141 unauthorized loan apps, yet loopholes persist, leaving low-income families particularly vulnerable. Victims often describe how small loans ballooned into massive debts through hidden charges, rollovers, and intimidation.
Digital rights experts warn that Pakistan’s low financial literacy and weak consumer protections make it fertile ground for such abuses. “These companies operate like loan sharks in people’s pockets,” said Nighat Dad from the Digital Rights Foundation.
The SECP is now reporting fake ads to the FIA and PTA, urging citizens to verify lenders against its official list of licensed companies. However, without stricter monitoring and stronger redress systems, many Pakistanis remain at risk of falling into the digital debt trap.