The surge in cyber fraud cases linked to illegal digital lending apps has raised concerns among consumers in India. In response to the growing number of complaints against these apps, Google has partnered with the Fintech Association for Consumer Empowerment (FACE) to tackle this issue head-on. This collaboration aims to create a safer digital environment for internet users and protect them from scams perpetuated by predatory digital lending apps.
Safeguarding Against Online Fraud:
In October 2023, Google announced its partnership with FACE, a crucial move to safeguard consumers from online fraud and create a reliable digital ecosystem. FACE will now work closely with Google to provide market intelligence to identify predatory digital lending apps in India that do not comply with Play Store policies, enabling swift actions against them.
Strengthening User Protection:
This collaboration is set to strengthen user protection and promote the values of responsibility and ethics among stakeholders in the digital lending industry. By doing so, they aim to drive positive change and enhance consumer trust in the digital lending space.
The Need for Stricter Industry Standards:
While the digital lending industry has filled a void left by the traditional financial system in India, it has faced challenges, especially in the form of fraudulent lending apps. Anil Pinapala, the CEO of FlexPay by Vivifi, a non-banking financial company (NBFC), highlights the need for stricter industry standards due to questionable practices and inadequate disclosures by certain digital lending players. Fortunately, regulators have stepped in, laying down guidelines that standardise disclosures and ensure transparency for borrowers.
Collaboration Benefits Borrowers:
The Google-FACE collaboration is a win for borrowers, as it guarantees access to safe lending apps. This initiative prevents fraudsters from exploiting consumers by closely monitoring new entrants and app ratings in the Google Play Store. Any suspicious activity is reported to Google for further action, providing valuable insights into the tactics used by fraudsters.
Whitelisting Apps for Consumer Safety:
An essential aspect of this partnership is the potential whitelisting of apps, allowing consumers to easily identify regulated apps with clear guidance. This feature would further enhance consumer safety and trust in digital lending platforms.
Fostering a Safe Digital Environment:
Beyond fighting fraud, Google and FACE are committed to raising awareness nationwide and establishing a digital resource hub with content available in up to 15 Indian languages. This comprehensive approach ensures that consumers are well-informed and can confidently engage with digital lending apps.
Successes of FACE and Google:
FACE has been instrumental in monitoring the digital lending landscape in India and has reported over 700 dubious apps to various authorities in the past 15 months. On Google’s end, it has consistently worked to combat fraud caused by personal loan apps by updating policies and enforcing them. In 2022, Google took enforcement action against more than 3,500 personal loan apps for policy violations on the Play Store.
The collaboration between Google and FACE represents a significant step toward enhancing consumer protection and trust in digital lending apps in India. By working together to detect and eliminate predatory lending apps, this partnership contributes to the broader goal of creating a secure and reliable digital environment for all users.
