Lenders are turning to coercive loan apps that shut down smartphones

Sometimes I understand the rationale here of such apps.<p>In Africa, many electrical utilities were failing to get consumers to pay on time electrical bills. That when we started implementing prepaid electricity meters: you estimate how much you will consume over the course of a month, you buy those kWh on a monthly basis. If they finish, the light goes out automatically.<p>Electrical utilities are now less dependent on the goodwill of the consumer to pay bills. And here in many african countries, there is no simple way to track a person in order to make him repay a debt.<p>Imagine peoples buying nice Samsung phones on a loan ( ex $560&#x2F;phone is huge), how do you track them in order to get back your loan? Some hikes the price of calls and SMS, some do other things and finally other install a kill switch.

This is a great tool, honestly. The problem appears to be that the original owner passed on a restricted device to someone else while pretending it wasn&#x27;t a restricted device. This is like if you sold a car with an ignition interlock device and somehow suckered the new owner.<p>The law will eat you alive (as it should) rather than the ignition interlock manufacturer. However, in India, the law is completely absent at best and an active tool of your enemies at its worst.

Your rights under law matter.<p>I bang on about the idea of a MOOP - where our daily behaviour is monitored (by phones) and then can be used to <i>improve</i> our lives - from basic budgeting to helping us with communication styles and relationship advice (94% of husbands with marriages rated happy would stop now and not continue this argument. Press any key)<p>But to do that demands medical levels of trust around the behaviour data - a d that needs both law and culture to be relentlessly clear about the trust levels.<p>A leak of your argument rate with your kids should be seen as similar as a leak of your heart rate.<p>And because all these things are linked, perhaps your credit rating should be seen as protected as your medical records.<p>Anyway, this is a form of predatory lending - they cannot charge 1000% APR so charge it implicitly through the threat of losing a phone. Only the desperate will apply - which should be a very good reason for not giving the loan.<p>(Then again, perhaps putting the app out there is a good signal that the lender should go to jail immmediately and be banned from financial industry. )

Your phone, car, door, power, and credit card can all now be turned off remotely. This has substantial hacking potential.

This article reads like an episode of Black Mirror. What is wrong with India...<p>This whole practice is despicable. And extremely predatory on the uneducated masses. Wouldn&#x27;t be too far-fetched to see shady companies buying this data and re-targeting the same customers with other dubious financial products and loans.<p>Lauded for being one of the most progressive countries in internet infrastructure &amp; access, the government of India is sleeping on this if not outright colluding with these unscrupulous corporate scammers.

This is basically the cellphone version of a GPS-enabled, LTE-connected ignition system connected tracking device in a car purchased from an American &quot;buy here, pay here&quot; used car lot.<p><a href="https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=4U2eDJnwz_s" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=4U2eDJnwz_s</a><p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Buy_here,_pay_here" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Buy_here,_pay_here</a>

I think the article clearly states the reason for this.<p>There is a lack of formal credit scores or collateral making it difficult to assess loan-worthiness. Combine that with the fact that a disabled phone is no good for the owner or the lender, there is a substantial risk involved. And interest rates are nothing but a measure of risk premium.

When are we going to realize that any lending with expectation of profit (usury, interest, etc.) is predatory? There&#x27;s a reason that these loans are prohibited in Islam, Judaism, and Christianity. Yet, we keep thinking that there can exist the phenomenon of lending for profit, and keep a society going without its destructive behaviors. Time and time again it&#x27;s shown to be parasitic and causes huge inequality.

I AirBnBed an apartment a little more than a year ago, from a super nice, even slightly naive, owners.<p>They instructed me to leave the apartment keys on the kitchen table when I departure, and leave the door unlocked. &quot;You see&quot;, the explained, &quot;it&#x27;s a smart house. We can control everything from our phones! The door, lights, stove tv -- everything!&quot;.<p>They were proud of how advanced they are (naive, as I said), while I was a bit freaked out they (or their kids) would play with stuff in the apartment during my stay.

This article really deserves more attention. I hope you repost it at some point.<p>The <i>Datacultr</i> app mentioned is a particularly barefaced example of efficiently extracting small amounts of money from many users through hardware control.<p>There&#x27;s also the idea of (effectively) embedding loans in smart hardware so they follow whoever&#x27;s actually trying to use it. (Also already thing with cars.)<p>Both techniques seem likely to have many other applications. Probably very unpleasant ones.

In this story, wasn&#x27;t Zameer was defrauded into paying for a phone that the seller had no right to sell? The seller didn&#x27;t completely own it. So Zameer isn&#x27;t really the owner now.<p>Despite that, I think it would have been cool for Zameer to appropriate this phone, pay absolutely zero part of the loan, and hack it to remove the DRM. I hope lots of people in India learn how to do this and make this scam go extinct, and make a handsome profit.

This should be illegal. Now I’m in a bad mood.<p>Even if you have a judgment against you, you have rights.<p>Oh yea, never liked the ignition lock either, or the boot.<p>Make companies go through the court system if they have a problem with you.

People who think this should be banned don&#x27;t realize that people who really want the phone can get into even worse arrangements to directly get cash to get the devices. In India it is not uncommon for poor people to get loans that are at about 10-20% per day interest rate. The incentives and dynamics behind this are quite interesting but suffice it to say that just banning this is unlikely to improve the conditions of the people who want these devices and may even make it worse.

Well it&#x27;s not all true. If you&#x27;ve had a bad app experience, don&#x27;t extend it to all apps in the playmarket. In any case, if the application does not triple you, you can contact a reliable service and get a loan via NorthnLoans. I advise you to read before writing anything.

For those who get offended by contracts between consenting adults, feast yourself on &#x27;Airtime credit&#x27;.<p>You can &#x27;borrow&#x27; airtime from the operator and pay it back (at a premium of course) when you next recharge.<p><a href="https:&#x2F;&#x2F;www.airvantage.co.za&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.airvantage.co.za&#x2F;</a>

Reminds one of the opening scene fron The 5th element or the opening of Ubiq from Phillip K. Dick.

Reminder: if services like this are banned, the alternative remaining for the users is the same as if their phone were locked out: no phone.<p>This is a way of extending credit to the high-risk. Without a way of reducing that risk, the credit won&#x27;t be extended, and they will be worse off overall.

How is an app able to lock out the whole phone?

Funny how Apple does similar thing when they think you owe them money. Sure, the phone is not in a total shutdown, but it is still crippled.

Foucault&#x27;s nightmare, realized.

What keeps users from rooting the phone and deleting the &quot;undeletable&quot; app? It&#x27;s installed at point of sale which means a factory reset should get rid of it.<p>The only exception <i>may</i> be Samsung&#x27;s Knoxguard in its newest iterations which requires the device to &quot;phone home&quot; to Samsung to unlock the bootloader.