Google will implement a new rule for apps providing personal loans starting on May 31st that could help protect users from abuse and harassment. The tech giant has updated its policy (via TechCrunch) to prohibit cash lending applications from being able to access users' contacts list. They will no longer be able to access people's photos and videos, as well, whether they're saved on the phone itself or an external storage.
This is but one of the changes Google has implemented over the past year, following multiple reports of harassment from certain markets, such as India, Pakistan, Kenya and the Philippines. It's common for loan apps to require access to users' phonebooks and media before they lend money. The fact that people can easily install these apps on their phones makes them look like a pretty convenient solution for sudden monetary issues. But since they typically charge exorbitant interest rates, a lot of borrowers end up having difficulties keeping up with payments. That's when the abuse begins.
Agents for these services would mass send profanity-laden texts to all the borrower's contacts, including random acquaintances and co-workers, in an attempt to humiliate them into paying. Some would even go as far as to threaten them and their family bodily harm. As TechCrunch previously reported, the abuse got so bad for some people that it had driven them to suicide.
In an attempt to keep these loan sharks under control, Google implemented rules for India, Indonesia, the Philippines, Nigeria, Kenya, and Pakistan, requiring them to submit proof of approval and other documentation from the appropriate government agencies. In the US, Google banned payday loan apps with an annual percentage rate of 36 percent or higher way back in 2019. And in Pakistan, non-banking financial institutions will only be allowed to publish one lending app on the Play Store starting on May 31st.
The tech giant tightened its screening measures for lending apps a year ago in the Philippines, where I live. I still see an enormous number of loan apps when I look at the Play Store, though, and still regularly hear stories about users being hounded by their agents. Clearly, the stricter screening rules weren't enough, but Google blocking these application from accessing people's phonebooks sounds like a step in the right direction.