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