New Delhi: Tech giant Google has removed, several digital lending applications, unauthorized by any financial regulator, from its app download platform Google Playstore. These rogue apps were there on the platform for over three months and their names resembled legit companies which confused users.
As per a recent ToI report, these unregulated lending apps offered users short-term credit at very high-interest rates. In certain cases. these apps even harassed or abused the borrowers for repayment. Following queries sent by the national daily to Google, the technology giant took down five such apps including Ok Cash, Go Cash, Flip Cash, ECash and SnapItLoan.
The publication quoted fintech researcher Srikanth L, who studied at least 10 such apps, saying that, “Such unauthorized apps grew during the lockdown when people needed quick cash. The apps’ names resembled legit companies. Many people did
not know how to distinguish between the two. They were downloaded by at least 400,000 to 1 million people,”
A Google spokesperson told the publication last week, “Our Google Play Developer Policies are designed to protect users and keep them safe, and we recently expanded our Financial Services policy to help protect people from deceptive and exploitative personal loan terms. When violations are found, we take action,”
Note that as per Google’s policies, if any app “contains or promotes financial products and services”, it must comply with state and local regulations for any region or country. However, Srikanth’s research revealed that these apps had their servers hosted on Alibaba Cloud, a Chinese company.
The report further quoted Srikanth saying, “A common feature among these apps is that they have no legal entity in India. It is possible that some money is laundered through this as all these transactions will be outside the regulatory purview of RBI. They also did not list any grievance officer’s numbers and did not have any valid address listed on Play Store.”
In fact, recently, one such app which is still available on the PlayStore came to light when several users pointed out that it harasses people during the repayment process. A screenshot went viral on Twitter which showed an executive from the app asking a girl to send him nude pictures after she defaulted on a payment. The Tamil Nadu girl, tired of the harassment, eventually attempted suicide. Another one of the borrowers left a comment on the Playstore about his experience, stating that executives from the company had allegedly called and abused him for being just a day late with his repayment.
These apps are a huge privacy threat as well. Srikanth told the publication that these applications asked for more permissions than required, and some even had access to the users’ smartphone galleries, putting their private data at risk. Since these apps are not regulated, they don’t follow any rules. Also, unlike banks and NBFCs which are regulated, these platforms employ a wide range of intimidation tactics, including calling the borrowers’ contacts to shame them.
He further shared that there have been cases of executives threatening to make private pictures of users public in case of non-payment. He added that aside from removal from the Playstore, the only way to reduce the effectiveness of these rogue apps would be awareness, better regulation and increased digital literacy.
“We need to have more informed consumers who understand the differences between rogue apps and legit ones. Platforms like Google, too, need to strengthen their app store policies so that these apps do not make it to the top of their Playstore list,” he was quoted saying.