Google to prohibit personal loan apps from accessing user photos, contacts

Google plans to restrict apps that offer loan to individuals from accessing sensitive user data such as photos, videos and contacts, as the Android maker steps up its response to the rise of predatory behavior from some lenders that harass borrowers.

The search giant pushed an update to its Personal Loans policy on Wednesday for apps on Play Store to bring new restrictions prohibiting apps from accessing external storage, photos, videos, contacts, precise location and call logs. The change will come into effect from May 31.

"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," the company said in its update.

According to recent accounts, an emerging trend has raised concerns as certain individuals who have acquired credit via mobile apps have experienced harassment by debt collectors. These recovery agents have allegedly accessed the borrowers' personal contacts, informing friends and family of outstanding debts. In more 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 taken their own lives.

Predatory loan apps in India rake in huge fees, and are driving some users to suicide

Such instances were well reported in markets including India and Kenya. Google responded initially by blocking hundreds and thousands of personal loan apps from the Play Store after alerted by law enforcement agencies and central banks. The company also introduced rules to ban unlicensed loan apps from the Android app store.

Google said it has also introduced the requirement of carrying out specific licensing documentation for apps appearing on the Play Store offering personal loans in Pakistan to "prove their ability to provide or facilitate" credit. The company also made it mandatory for non-banking financial companies in the country to have only a single digital lending app on the Play Store.

"Developers who attempt to publish more than one DLA per NBFC risk the termination of their developer account and any other associated accounts," Google said.

The Android maker has been criticized in the past for not taking strong measures against predatory loan apps. As a response, the company introduced policy updates in markets including India, Indonesia, Nigeria, Kenya and the Philippines.