Google has announced plans to limit personal loan apps from accessing sensitive user data such as photos, videos, and contacts in response to the growing issue of predatory lending practices and harassment of borrowers.
The tech giant updated its Personal Loans policy on Wednesday for apps on the Play Store, introducing new restrictions that prevent apps from accessing external storage, photos, videos, contacts, precise location, and call logs. These changes will take effect from May 31.
In the updated policy, Google stated, “Apps that provide personal loans, or have the primary purpose of facilitating access to personal loans (i.e., lead generators or facilitators), are prohibited from accessing sensitive data, such as photos and contacts.”
Recent reports have highlighted a worrying trend where borrowers who obtained credit through mobile apps have faced harassment from debt collectors.
In some cases, these recovery agents accessed borrowers’ personal contacts, informing friends and family about outstanding debts.
In more extreme situations, they used manipulated images to further intimidate and distress debtors.
Tragically, some of these targeted individuals have taken their own lives as a result of the pressure.
This issue has been particularly prevalent in markets such as India and Kenya.
Google initially responded by removing hundreds and thousands of personal loan apps from the Play Store following alerts from law enforcement agencies and central banks.
The company also introduced rules to ban unlicensed loan apps from the Android app store.
In addition, Google now requires loan apps on the Play Store in Pakistan to provide specific licensing documentation to demonstrate their ability to offer or facilitate credit.
The company has also made it mandatory for non-banking financial companies (NBFCs) in the country to list only a single digital lending app on the Play Store.
Google warned, “Developers who attempt to publish more than one DLA per NBFC risk the termination of their developer account and any other associated accounts.”
In the past, the Android creator faced criticism for not taking stronger action against predatory loan apps.
Innovation Village reported last year that the company has introduced policy updates in markets including India, Indonesia, Nigeria, Kenya, and the Philippines. Unauthorised loan app operations are commonly based in these nations.
