The Securities and Exchange Commission of Pakistan has banned 120 loan apps in the country to save people from falling into ‘debt traps’.

A statement by the SECP said that the apps had been banned in coordination with Google, Apple and the Pakistan Telecommunication Authority.

SECP said that the emergence of loan apps had raised concerns about ‘mis-selling, data privacy violations and coercive recovery practices’.

The statement also added that the banned apps were indentiefied through surveillance and complaints and the Federal Investigation Agency was also taking action against them.

It also added that Google had introduced a ‘Personal Loan App Policy’ through which only SECP approved apps would be allowed to oeprate in the country.

SECP said it has a framework for making sure loan apps operate transparently by decalring their terms upfront.

The matter of loan apps trapping came to surface after a father of two children was driven to suicide after being unable to pay a loan.

Subsequent reporting had revealed widespread malpractice including harassment and mideclaration of terms by the apps, prompting authorities to take action.