The Securities and Exchange Commission of Pakistan (SECP) has cautioned the general public against falling victim to illegal and exploitative personal loan schemes, noting it has successfully cracked down on 141 unauthorized digital lending apps.
Maintaining it continues vigilant monitoring of social media platforms, the SECP said the crackdown had succeeded through the coordinated efforts of relevant stakeholders. However, it warned, operators of such schemes had now resorted to alternative channels, primarily social media, to continue their fraudulent activities.
The SECP has observed sponsored advertisements on platforms such as Facebook, falsely offering quick, interest-free loans with minimal requirements. These promotions, it warned, fraudulently cite names of reputable organizations to falsely project legitimacy and gain public trust. These advertisements are used to lure unsuspecting individuals into paying upfront charges under the guise of processing, registration, insurance, or account verification fees, or into sharing sensitive personal information. Once the payment or information is processed, the scammers disappear without disbursing any loan.
The SECP said it is actively reporting such platforms to the Federal Investigation Agency (FIA) and the Pakistan Telecommunication Authority (PTA) for action against the culprits, as well as to ensure the prompt removal of fraudulent advertisements.
The general public is strongly advised to remain cautious, verify the authenticity of any financial offer or lending platform, and refrain from sharing personal or financial information with unverified sources. The SECP has noted it retains a list of licensed companies and approved personal loan apps on its website for the convenience of the public.