The Senate Standing Committee on Information Technology and Telecommunications, chaired by Senator Palwasha Khan, was briefed by the National Cyber Crimes Investigation Agency (NCCIA) on the alarming rise of online frauds in Pakistan, particularly those involving loan apps.

Officials revealed that some online loan apps were charging interest rates as high as 1,800%, while also misusing access to borrowers’ phone galleries and contacts for blackmail. “People borrowed as little as Rs. 5,000 for food, but ended up trapped in a cycle of debt,” an NCCIA representative told the committee.

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The Securities and Exchange Commission of Pakistan (SECP) initially licensed these companies in 2020 without strict regulations. However, it has since revised its framework, capping interest rates at 100% and prohibiting apps from accessing personal data. Authorities confirmed that over 90% of fraudulent loan apps have been shut down.

The scams are not limited to apps alone. Social media platforms, including Facebook, have been used to promote fake “interest-free” loan schemes. These ads exploit the names of reputable organizations to appear legitimate. Victims are often asked to pay upfront charges for processing, registration, insurance, or account verification, or are tricked into sharing sensitive personal information. Once obtained, the fraudsters vanish without providing any loan.

The committee stressed the urgent need for stronger regulatory enforcement, public awareness, and digital literacy to safeguard citizens from falling prey to such scams.