Dozens of deceitful loan applications have been identified on Apple’s App Store and Google Play, with an alarming 15 million downloads in total. According to cybersecurity company Lookout, these apps focus on users from Africa, Asia, and Latin America, and 35 were even listed among the top 100 finance platforms in certain regions. Google and Apple have since acted on Lookout’s report, resulting in the apps’ removal.
The team at Lookout revealed several groups may be responsible for these apps, as only limited similarity was found between their codebases. However, all applications shared a similar strategy: tricking victims into accepting unfair loan terms and pressurising them into repayment. The primary targets were from developing nations such as Colombia, India, Indonesia, Kenya, Mexico, Nigeria, the Philippines, Thailand, and Uganda, as these areas were found lucrative.
Ruohan Xiong, a Senior Security Intelligence Researcher at Lookout, highlighted that these predatory loan applications pose serious threats to individuals’ personal data. Borrowers are enticed into accepting “reasonable” loan conditions only to be roped into unfair contracts with extensive personal data requisites. Users must grant permission to access sensitive data like call logs, text messages, installed apps, photos, and their contact lists. Some apps even ask for names, addresses, work history, academic background, and banking details, and require ID verification using a selfie video.
Users start complaining of hidden charges, exorbitant interest rates, and unfair repayment conditions right after they sign up. According to Lookout, once permissions are granted, data extraction ensues instantly. There have been reports of operators using the gathered data to pressure users into repayment by harassing them or their contacts. Some even resort to threatening to reveal their debt to contacts.
Predatory lending apps seem immune to their low reviews, indicating a disregard for their reputation, hinting a potential outcome of lax financial regulations or non-enforcement.
Google has started managing these scams on its platform and has already removed 2,000 loan applications from the Play Store in India.
Such apps constitute a significant problem in developing countries where people find it difficult to access conventional financial services and are forced to riskier options instead. As a result, Lookout has indicated that scam loan apps are more widespread on Android due to its popularity in developing countries.
## Frequently Asked Questions
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Why are the predatory loan apps so prevalent in developing countries?
Lack of access to conventional banking and financial services in these regions compels residents to resort to more hazardous alternatives like these apps.
How do these predatory loan apps trick users into granting permission for access to sensitive personal data?
These apps often start with easy, fully digital offer attractive loan offers with seemingly reasonable conditions. However, once the user signs up, they are trapped in unfair contracts and forced to provide access to personal data.
How are Google and Apple responding to this situation?
Upon receiving Lookout’s report, both Google and Apple have taken steps to remove these fraudulent loan apps from their platforms. Google has already removed over 2000 such apps from its Play Store in India.
