Banks aren't the only entities dealing with money, and credit cards aren't the only way people can pay for things using accrued debt.
While other financial institutions have long existed in the past, in the modern days of mobile and internet, it's getting extremely easy to get a loan. There is a long list of mobile apps that provide users with personal loans, with the process that is so easy that anyone to fall for it, even when they currently don't need the money.
Google is the tech giant that controls Android.
This time, it's updating its policy on personal loan apps on Android, in order to ban them from accessing personal data on users' phone.
This includes access to photos/videos, contacts, phone numbers, precise location data, or external storage.
In a dedicated help page, Google said that:
When the world was still offline, and that loan sharks are not hiding behind computer screens, debt collection could sometimes involve force.
Historically, debtors could be the subjects of debt slavery, debtor's prison, or coercive collection methods. This is why in the past, loan sharks are the least preferable way to loan money.
But in the modern days of mobile and internet, debt collection has stepped up their methods as well.
No longer are they required to locate their targets by physically visiting them, or forcing them to pay, because with the internet, all they need is to siphon debtors' personal information, and use that information against them.
By having access to debtors' photos/videos, contacts, phone numbers, precise location data, or external storage, there are trove of data that can be extracted.
Personal data like these can be so expensive if they fall to the wrong hands, that debt collection can be considered an extorsion, to say the least.
Because of this, the change from Google is likely the result of the trend where mobile apps have been used by debt collectors who have allegedly pulled the users personal contacts from their phone through the app to contact friends and family about the outstanding debts.
This kind of move is considered a predatory behavior to harass borrowers, to indirectly forced them to pay their debts, or the money they owe.
These recovery agents have allegedly accessed borrowers’ personal data, and in some extreme cases, agents have employed manipulated images to further intimidate and distress those in debt.
Tragically, a number of these targeted individuals have succumbed to the pressure and some have taken their own lives.
This has been especially common in India and Kenya, for example.
Besides restricting those loan apps from ever accessing users' personal data, Google also said that those apps "must have the App Category set to 'Finance' in Play Console', and disclose the following information in the app metadata:
- Minimum and maximum period for repayment.
- Maximum Annual Percentage Rate (APR), which generally includes interest rate plus fees and other costs for a year, or similar other rate calculated consistently with local law.
- A representative example of the total cost of the loan, including the principal and all applicable fees.
- A privacy policy that comprehensively discloses the access, collection, use, and sharing of personal and sensitive user data, subject to the restrictions outlined in this policy.
The updated policy change is meant to come into effect starting May 31, 2023.