CCP Warns Against Using Micro-Credit, Nano-Loan Facilities
News Desk
Islamabad: The Competition Commission of Pakistan (CCP) issued a warning to the public regarding the growing trend of mobile app-based micro-credit and nano-loan facilities. These applications, available on Google PlayStore and AppStore, offer short-term financing to borrowers, but are currently encountering numerous complaints and challenges in their track-and-trace process.
The CCP has initiated an inquiry against these applications, which are observed to constantly change their premises and the companies or undertakings behind them
Until the conclusion of the inquiry, the CCP deems it necessary to alert the general public about the many issues observed and how to avoid them. The CCP has also been in touch with the Securities and Exchange Commission of Pakistan (SECP), the Federal Investigation Agency (FIA), and the Pakistan Telecommunication Authority (PTA) in this regard. Most of these applications operate without complying with Pakistan’s regulatory framework.
It’s imperative to confirm that the applications from which consumers are borrowing are legitimately registered and compliant
Furthermore, these apps may have a tendency to seize whole control of the user’s device by requesting that they accept the app’s normal access permissions. The user may be vulnerable to the developer of such applications as well as having their privacy compromised. So that they can make an informed choice, users are advised to carefully read the terms and conditions offered.
When applying for a loan through these mobile app-based micro-credit and nano-loan facilities, users are presented with various terms and conditions that outline the time period for which the loan is extended, the exact amount of loan disbursed, deductions made from the total loan requested, payment and repayment methods, and any hidden charges. It has been observed that these terms and conditions are often at variance with what is advertised, resulting in deception or fraud.
To avoid falling prey to fraudulent activities, it is important for the public to be aware that there have been instances where recovery agents have given their personal account details instead of the lender’s valid account
This can result in payments not being adjusted against the repayment and cause further inconvenience to borrowers. Consumers need to be careful and only make payments on the registered accounts of the mobile app-based micro-credit and nano-loan facilities.
When using mobile apps for microcredit and nano-loans, CCP admonished the public to use caution and due diligence. The general public, primarily vulnerable consumers from the lower to moderate income level, downloaded these applications in excess of 10 million times, according to the preliminary statistics.
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