Personal loan apps will get less predatory with this Google Play policy change

The Google Play Store hosts hundreds and thousands of apps, and you’ll definitely find an app that serves your need. If your need was a quick loan, then you’d also find hundreds of lending apps that would offer you one easily.

These apps often take a predatory turn though, harvesting the user’s contacts and personal files in a bid to get them to repay the loan. Google is cracking down on these practices, with the latest Google Play policy changes prohibiting personal loan apps from accessing sensitive user data.

As spotted by Techcrunch, Google has pushed an update to its Personal Loans policy for apps on the Play Store. This policy update adds several new restrictions for these apps. Apps that provide personal loans will be prohibited from accessing sensitive user data, such as photos, videos, contacts, precise location, and call logs. Read the relevant policy excerpt below:

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 following permissions are prohibited on apps that are classified as personal loan apps:

• Read_external_storage
• Read_media_images
• Read_contacts
• Access_fine_location
• Read_phone_numbers
• Read_media_videos

With this change, personal loan apps will not be able to harvest user data for debt collection purposes. The policy change comes into effect on May 31, 2023.

In several regions of the world, individuals who have taken loans from these apps and have been unable to repay, find themselves allegedly harassed by debt collectors. What worsens the situation is that these recovery agents allegedly access the personal contacts of the borrower and inform their friends and family of these outstanding debts in order to shame them into repayment. There have also been reports of these recovery agents manipulating images to further intimidate the borrower.

Google’s history with loan apps

Google had previously reacted against a subset of loan apps. Apps that offered short-term loans (usually under 60 days) at very high-interest rates were marked as predatory loan apps and have been banned from being listed on the Google Play Store.

In the United States, Google does not allow apps for personal loans where the Annual Percentage Rate (APR) is 36% or higher. In other regions like Southeast Asia and Africa, Google has other policy requirements to regulate these apps.

There’s definitely an element of demand and supply with these lending apps. But there’s also an overarching responsibility on Google to protect the interests of consumers on its platform, especially those who may not completely understand the terms of the contract they are entering into.

The move to stop lending apps from accessing sensitive data is a step in the right direction. But we can’t help but feel that the apps will find another way to coerce users into repayment, without reconsidering their lending practices. It’s a game of cat and mouse, so we hope Google stays on top of it.