22 ms·

Mexican Loan Apps, Extortion, and the Google Play Store

200 points by blopeur 4y ago

josephcsible 4y ago
More proof that Google doesn't care about you: they ban call recording apps from the Play Store but not apps like these ones.
- tjpnz 4y ago
  Similar situation on YouTube. Posting historical footage of the Apollo program nets you Copyright strikes while actual criminals can livestream crypto scams with utter impunity.
  - prvit 4y ago
    This is nonsense though. Criminals livestreaming crypto scams go through hundreds of hacked accounts every day, their stuff is constantly getting taken down. It's just their incentive structure which is different than that of the Apollo program footage uploader.
    - tjpnz 4y ago
      Except they're not all getting taken down. I've observed multiple fake Elon Musk/SpaceX accounts with histories going back months.
    - throw_m239339 4y ago
      I remember during the PS5 reveal stream, Youtube was recommending me crypto scam live streams promising free PS5 and Youtube was taking down none of them. Youtube was actively recommending me scams, I don't care how flawed their recommendation algorithm is, it was unacceptable.
    - Nextgrid 4y ago
      > go through hundreds of hacked accounts every day, their stuff is constantly getting taken down. YouTube has very advanced image & voice recognition technology that is very efficient at flagging (and demonetizing) certain content merely based on trigger words (terrible for science channels that show fire/explosions/etc even though there is no violence involved). If crypto is such a popular target, maybe introduce an extra verification step (that requires uploading ID/etc) to whitelist channels for crypto-related content, and any other channels that have not done the verification (because they don't plan to upload crypto content) can't upload anything that matches those words? This would at least prevent non-crypto-related channels from being hacked and suddenly starting a crypto scam livestream. The reason it's not done of course is because Google bears no liability (despite promoting these scams in the "recommended" section) and the scammers & victims still generate "engagement" and watch ads.
      - prvit 4y ago
        >YouTube has very advanced image & voice recognition technology that is very efficient at flagging (and demonetizing) certain content merely based on trigger words (terrible for science channels that show fire/explosions/etc even though there is no violence involved). Or perhaps the technology isn't that advanced, and cryptocurrency scammers have stronger incentives to work around it than legitimate channels?
- fzfaa 4y ago
  Why should they blanket ban loan apps?
  - josephcsible 4y ago
    They shouldn't blanket ban all loan apps, but they should ban ones that steal all of your data when you open them, that lie about their terms, or that consider extortion or defamation to be acceptable debt collection methods.
- xtracto 4y ago
  It's strange and crazy: back in 2014 I worked building what we thought was a reputable online lending platform in Mexico. We were the first online lender. And we were at least trying to do things right. Nevertheless, Google banned us from AdWords/Adsense: we could not advertise our services even if people searched for the company name. The list of banned businesses was: porn, drug,guns and us... that's how "low" was the stance of the business we were doing. Ff to this day it seems The Goog has seen good money in this vertical , so that it turns a blind eye to fraud.
nixcraft 4y ago
These scams are going on in India too. Typically they offer $100-$200 loans, and there is no legal framework. Victims are afraid to go to the police. Even if someone goes to the police, these apps are all running from China, and they can't do much about it. From the BBC article: "The people running the apps gained access to all the contacts on his phone and his pictures, and have threated to send nude pictures of his wife to everyone on his phone."[1] It is a horrible system, and Google doesn't care about poor people getting scammed. Some victims even committed suicide because of the threat of releasing their private data. [1]https://www.bbc.com/news/business-61564038 https://www.bbc.com/news/business-61564038
- nikanj 4y ago
  It’s interesting how popular Google products remain, considering their well-earned reputation of Never Giving A Shit
  - rahimnathwani 4y ago
    "these apps are all running from China" I'm curious about this. Can you please tell us more?
    - nixcraft 4y ago
      The servers for these apps are in China, but the owners are in other countries, Mexico, India, China etc. So it is hard for police to get a warrant to shut down servers when crossborder issues are involved. I am not an expert in such crimes, but they make it hard for local police to shut them down.
      - oefrha 4y ago
        If the government can ban TikTok and a bunch of other popular apps overnight, surely it’s not hard to get scam apps removed from Google Play if they cared at all?
        4y ago
Biologist123 4y ago
As I understand it, the way these apps work is: 1. The loan interest rate is set relative to a base default rate of a population sample of lenders. Therefore very easy to predict capital return, but means interest rates are usually high to cover high rate of defaults. 2. Defaulting loans are sold to local debt collectors for collection, who presumably are quite ruthless. 3. There are a few companies which white label the software needed to run this sort of scheme, so presumably the operator only has to drop in capital. If you have further information on how these businesses work, please respond!
- nerdponx 4y ago
  The article also states that the apps deliberately obfuscate the costs (50% fee deducted from the loan amount) and terms (due in 7 days with 300% interest) of the loan.
- xtracto 4y ago
  I built the system of reputale a Mexican startup that did online lending, so I have some insight: 1. This is a real problem in Mexico: people complain about high interest rates. However, for these kind of bullet loans , you see 30% of default in the FIRST loan. And back when we were starting on 2013-14 we had up to 70% of default due to fraud. So, with around 30% 1st default and about 15% 2nd default, we created revenue models that considered that, CAC, cost of funds and opex to define the interest rate... that very high APR really was not making people rich overnight. See, one problem in Mexico is that defaulting in a loan is not a crime, so theres legally NOTHING a lender can do to make you pay if you decide not to. The only repercussion is that you Credit Buro gets tainted, for 6 years. I've read of people that get a $100,000MXN loan and then just change phones, move apartments and wait for 6 years to clean their credit buro. 2. Default loans deffinitely are sold, for cents to the peso. But usually only the ones that are very old. Now, there are different types of collection agencies. Where I worked, we tried to he very reputable so we only chose the least shady ones. But in reality the only thing they could do is call you. Even calling your provided references is illegal. We actually stopped asking for references IIRC. 3. I dont know but dont doubt it. BUT, have a look at Fineract/MifosX: an open source loan management system. Its relatively easy to setup a lending operation using that. It's pretty comprehensive. All in all, there are very shady app/online lending services in Mexico. But it is nothing exclusive of the internet. Way before this, you heard of lenders that would do "collections" by getting some tough guys from prison (yup, in some prisons they can get out for the day like nothing, for some cash) and knocking at the debtor's door with baseball bats, wrenches or any other hard weapon . If you didn't pay they broke your legs or worse. That now it happens online is only the natural evolution of the shithole that is my country, unfortunately.
donohoe 4y ago
It references this story which to me is very troubling: Contreras told the story of one woman who fell victim to these schemes named Maria. After Maria took a loan, agents for the app iFectivo sent her 13-year-old daughter, her cousin, her nieces, and more than a dozen of her other contacts a picture of a nude woman with her face photoshopped on. iFectivo told her contacts she had become a prostitute to pay her debts. Full story (referenced in TechPolicy article): https://restofworld.org/2022/mexico-scam-loan-apps/ https://restofworld.org/2022/mexico-scam-loan-apps/ Troubling, unethical, illegal stuff.
- fzfaa 4y ago
  What calls my attention of this story is that employees of that app would go through the trouble of creating a credible shopped image of her and sending it to all of her contacts. Do they have almost no clients, was the loan particularly big, do they have loads of employees just to do this...?
  - nyolfen 4y ago
    alternatively, it was just a real photo from her phone
  - thatguy0900 4y ago
    It is not hard at all to create a credible head swap photo shopped image. Probably a one man job to do it to everyone they want to do it too.
    - bornfreddy 4y ago
      With ML, it can be (unfortunately, in this case) automated. One victim - lots of work. Thousands - almost the same amount.
  - toxicFork 4y ago
    It was just the next jira ticket
  - duxup 4y ago
photochemsyn 4y ago
The whole microloan program has been hyped for over a decade now, but as this story shows, the outcome more often than not has been more like mafia loansharking than actual economic development under the entrepreneurial free-market model. This can be explained via the notion that "enterpreneurs without lawyers end up getting screwed over more often than not" and the people who get these microloans just can't afford to hire lawyers to protect themselves. While it's a right-wing trope, the microloan program has been heavily promoted by the likes of the Soros-Omidyar crowd, with the typical humanitarian patina covering what's really just predatory capitalism: "We have seen what microloans can do at the individual level and are excited about bringing that same opportunity to small and medium businesses," said Jim Bunch, Director of Investments at Omidyar Network. Here's another expository write-up of the phenomenon, in Cambodia. Looks very similar to India, Mexico, etc. https://www.aljazeera.com/economy/2019/8/6/cambodias-micro-loans-a-form-of-predatory-lending https://www.aljazeera.com/economy/2019/8/6/cambodias-micro-l... [edit] for more on background on this global trend and its origins (2007) > "Microcredit is the newest silver bullet for alleviating poverty. Wealthy philanthropists such as financier George Soros and eBay co-founder Pierre Omidyar are pledging hundreds of millions of dollars to the microcredit movement. Global commercial banks, such as Citigroup Inc. and Deutsche Bank AG, are establishing microfinance funds. Even people with just a few dollars to spare are going to microcredit Web sites and, with a click of the mouse, lending money to rice farmers in Ecuador and auto mechanics in Togo... Wealthy philanthropists, banks, and online donors aren’t the only ones fascinated with microcredit. The United Nations designated 2005 as the International Year of Microcredit..." https://ssir.org/articles/entry/microfinance_misses_its_mark https://ssir.org/articles/entry/microfinance_misses_its_mark
- AlbertCory 4y ago
  Whatever else it is, it isn't new. The Grameen Bank in Bangladesh was first publicized in the West 20 years ago. It also isn't "predatory capitalism." Rather, it's NGO-ism. It's charitable donations from liberal-minded people that drive it.
  - photochemsyn 4y ago
    Every time I hear these notions of well-meaning billionaire philanthropists set on making the world a better place, I'm unavoidably reminded of this short passage in Conrad's Heart of Darkness: > "It appeared, however, I was also one of the Workers, with a capital—you know. Something like an emissary of light, something like a lower sort of apostle. There had been a lot of such rot let loose in print and talk just about that time, and the excellent woman, living right in the rush of all that humbug, got carried off her feet. She talked about ‘weaning those ignorant millions from their horrid ways,’ till, upon my word, she made me quite uncomfortable. I ventured to hint that the Company was run for profit." If it was real philanthropy, the model would be one of no-strings-attached grants, delivered via a competitive process open to people in disadvantaged communities - not a model based on loans which must be repayed with interest, with collection agencies lurking in the background to go after defaulters in this manner. This is why people are better off cutting deals with the hard-nosed businesspeople who spell out risks and conditions upfront, rather than the liberal do-gooder snake-oil merchants with their ulterior motives.
siliconc0w 4y ago
It's a shame because I think there is a legitment use-case for micro-lending but there needs to be regulation and enforcement. Also asking for those kind of wide permissions should trigger some kind of additional review - a scam-filled untrusted ecosystem hurts all app developers.
AlbertCory 4y ago
While there is plenty of room for doubt about micro-lending (see [1] which I hosted, by Hugh Sinclair, a guy who's actually been there in the field), I don't think it's fair to call these scams "micro-lending." Maybe they're taking advantage of the favorite PR that micro-loans get. In the micro-lending plans that Oxfam and other legit charities back, borrowers meet in person with the lenders, and no hounding takes place. Most of them pay their loans back promptly. However, the stories about "poor woman buys a sewing machine; lifts her family out of poverty" are mostly just feel-good PR to milk the donors. More often, they buy a stall in the market to sell produce, and there's only so many stalls the market can support. The real scandal of micro-lending, as Hugh explains, is that the interest rates are scandalously high, and the lenders are mostly using it as a way to buy SUVs and milk the First World donors who want to feel good. These scams are not "micro-lending." [1] https://www.youtube.com/watch?v=rhdZ2RfmiXo https://www.youtube.com/watch?v=rhdZ2RfmiXo
- lupire 4y ago
  Microlending is also a scam, but a different kind -- just normal predatory high interest loans.
  - AlbertCory 4y ago
    Yeah, the difference is that "microfinance" manages to give itself a high-minded image and attract big bucks from Western donors, and go on 60 Minutes. While these payday lenders are universally regarded as scum. But they're not really all that different, as you point out.
leach 4y ago
Be aware of other scams too, some women are sending nudes to people and screenshoting theirs in hopes of extorting. Really have to just stay frosty all the time now.
- CharlesW 4y ago
  “Sending nudes” is the “committing private keys to a public repo” of dating.
  - leach 4y ago
    Yep, pretty much. Crazy what some people will do to just not work a regular job.
syntaxing 4y ago
100% serious question, does iOS prevent this? Or is the demographic of iOS vastly different?
- netr0ute 4y ago
  If you are getting a quick, small loan in Mexico, you probably don't have an iPhone because they cost multiple times as much as an Android one. So, it's not worth it to make these apps for iPhone users because that demographic is totally the opposite of what you want.
  - xtracto 4y ago
    I dont know why you are being downvoted. I know what You wrote is fact. I worked building the systems of such an online lending company in Mexico, and I had to fire my only iOS developer because we saw we dint have enough demand in those devices. Shootout to Jesus, the iOS developer & DJ. He was such a great guy to work for, and really killed me to let him go. He is a great guy :)
    - UlisesAC4 4y ago
      People don't know the demographic that consumes those apps in Mexico. It's true, people who go for these apps earn at most 300 usd per month an some of them with family.
- duskwuff 4y ago
  Apple does allow personal loan apps, but sets limits on interest rates and repayment deadlines (≤36% APR, ≥60 days) which effectively ban the type of app at issue here. Requesting permissions to all of the user's contacts and photos in a loan app wouldn't pass review, either, and the fact that Apple doesn't permit sideloading is an effective block against the "subway flyer" tactic.
- kioleanu 4y ago
  More important, Apple reviews all new apps going into the App Store. One of the rules is that you're not allowed to request more permissions that what the app actually needs. A loan app requesting all this info would never fly because it won't pass the human review. Also, it would be incredibly hard, if not impossible, to reupload an app that was banned under a different name - they have automated checks for this
londons_explore 4y ago
To be vulnerable to this kind of extortion, there has to be something about your life, true or false, that you'd prefer people not say about you. I was thinking, and I don't think there is anything that I wouldn't want said to my friends or family. Everything that could be said is either plainly untrue, or wouldn't sufficiently bother me to change my behaviour. I wonder how other people get into positions where this isn't the case for them?
- dymk 4y ago
  Be gay and live in most parts of the world
- npteljes 4y ago
  One of these vulnerabilities is living in Mexico. From TFA: "He starts getting this very, very graphic images of dismembered bodies. You know, real images probably taken from those websites that have pictures from drug dealers and the terrible things they do here in Mexico. So he’s being sent this true, these real pictures. And of course any Mexican will immediately get very scared, very intimidating, thinking that organized crime is behind something. You don’t want to be their target. You start fearing for your life. They have your address. They have information on your children, your wife, he’s very scared."
- pdntspa 4y ago
  > there has to be something about your life, true or false There are plenty of false things that anyone can say about literally anyone, including you. If the lie is well-crafted enough, good luck defending against it.
  - londons_explore 4y ago
    Perhaps give some examples? Everything I can think of is either easily demonstrably false, or I just wouldn't care, because my friends and family either wouldn't believe the attacker over my word, or because it just isn't something that matters to me.
    - 4y ago
wejick 4y ago
This kind of scam was so rampant in Indonesia until the government took strong stance, effectively sweeping the practice across the country. It's like Google doesn't even care about this things, in contrary they're so fast blocking and suspending app submissions that against their bottom line, like digital goods and payments methods.
xtracto 4y ago
Tangentially related to part of the text in the article : A lot of these and other apps ask you to share documents, camera, mic, gps, and other access from your phone . The problem is that several of those wont work if you reject that access. Even worse, Mexican government passed a law that made it compulsory to monitor your GPS position for Banks and other money related companies, so doing relatively common bank transactions require you to lose your privacy. Given these blatant privacy violations, I wish mobiles had the option to "mock" data for those sensors. Share files? Sure, give access to a jail like bkank file system. Share mic? Sure, give access to a white noise generated stream, same with video/camera. Share gps? Give some mock location, etc. That's what a privacy enabled device would do. I wonder why hasn't this even been implemented at the browser level.
- biggerChris 4y ago
  Do you have an iPhone and if it’s jailbroken; if Yes. Do you want to implement some of these ideas into Apple lockdown mode Api? Let me know if it’s something you are interested in?
- josephcsible 4y ago
  > The problem is that several of those wont work if you reject that access. For all of the crazy rules Google has for the Play Store, I don't know why they don't have one against this.
  - bongoman37 4y ago
- bornfreddy 4y ago
  Afaik this is what MicroG does, though their aim is different. They mimic Google services responses so that the apps work without G proprietary libraries and services but I don't think privacy is their stated goal (I'd love for someone to correct me if I'm wrong, not using MicroG myself).
- _HMCB_ 4y ago
  GPS position sharing is a little frightening isn’t it? I mean, if some of these apps are cartel or organized crime related, this could become a real physical threat.
sandGorgon 4y ago
>Last year, a Reuters investigation by Rina Chandran found dozens of lending apps in India that appeared to violate Google’s policies against short-term loans just FYI - this is contrary to the product and the law of India. Google is not the regulator. For example Manndeshi foundation runs 24 hour loans for women vegetable sellers - who take a loan in the morning and pay back at night. Google Play "ethics" is US-centric. It does not take into account the realities of the local demographics. for example sub 90 day loans are illegal on Play - a lot of microfinance in India/Bangladesh is sub 90 days. What ends up happening is demonisation of everyone not playing by Google Play's rules and gets termed as "predatory".
A4ET8a8uTh0 4y ago
I wonder if this has to happen in US so that people start treating privacy as a real issue and not tinfoil hat rant type complaint. Whenever I try to engage in this conversation, 'I have nothing to hide' is a very common refrain. At that point I typically ask for their phone to rummage through. Oddly, that is the moment they hesitate. It is not ok for me to have this information, but a faceless entity connected only by an app? No problem. I fear for the human race.
InfiniteRand 4y ago
Here's a question, are these shady apps necessarily worse than the village loan shark which is where the desperate turn to money otherwise? To some extent, the market for no-questions-asked risky loans is similar to gambling, drugs and prostitution, it's a perennial vice that's impossible to stamp out. Is formalizing it better than not formalizing it?

200 points by blopeur 4y ago

More proof that Google doesn't care about you: they ban call recording apps from the Play Store but not apps like these ones.

tjpnz 4y ago
Similar situation on YouTube. Posting historical footage of the Apollo program nets you Copyright strikes while actual criminals can livestream crypto scams with utter impunity.
- prvit 4y ago
  This is nonsense though. Criminals livestreaming crypto scams go through hundreds of hacked accounts every day, their stuff is constantly getting taken down. It's just their incentive structure which is different than that of the Apollo program footage uploader.
  - tjpnz 4y ago
    Except they're not all getting taken down. I've observed multiple fake Elon Musk/SpaceX accounts with histories going back months.
  - throw_m239339 4y ago
    I remember during the PS5 reveal stream, Youtube was recommending me crypto scam live streams promising free PS5 and Youtube was taking down none of them. Youtube was actively recommending me scams, I don't care how flawed their recommendation algorithm is, it was unacceptable.
  - Nextgrid 4y ago
    > go through hundreds of hacked accounts every day, their stuff is constantly getting taken down. YouTube has very advanced image & voice recognition technology that is very efficient at flagging (and demonetizing) certain content merely based on trigger words (terrible for science channels that show fire/explosions/etc even though there is no violence involved). If crypto is such a popular target, maybe introduce an extra verification step (that requires uploading ID/etc) to whitelist channels for crypto-related content, and any other channels that have not done the verification (because they don't plan to upload crypto content) can't upload anything that matches those words? This would at least prevent non-crypto-related channels from being hacked and suddenly starting a crypto scam livestream. The reason it's not done of course is because Google bears no liability (despite promoting these scams in the "recommended" section) and the scammers & victims still generate "engagement" and watch ads.
    - prvit 4y ago
      >YouTube has very advanced image & voice recognition technology that is very efficient at flagging (and demonetizing) certain content merely based on trigger words (terrible for science channels that show fire/explosions/etc even though there is no violence involved). Or perhaps the technology isn't that advanced, and cryptocurrency scammers have stronger incentives to work around it than legitimate channels?
fzfaa 4y ago
Why should they blanket ban loan apps?
- josephcsible 4y ago
  They shouldn't blanket ban all loan apps, but they should ban ones that steal all of your data when you open them, that lie about their terms, or that consider extortion or defamation to be acceptable debt collection methods.
xtracto 4y ago
It's strange and crazy: back in 2014 I worked building what we thought was a reputable online lending platform in Mexico. We were the first online lender. And we were at least trying to do things right. Nevertheless, Google banned us from AdWords/Adsense: we could not advertise our services even if people searched for the company name. The list of banned businesses was: porn, drug,guns and us... that's how "low" was the stance of the business we were doing. Ff to this day it seems The Goog has seen good money in this vertical , so that it turns a blind eye to fraud.

nixcraft 4y ago

These scams are going on in India too. Typically they offer $100-$200 loans, and there is no legal framework. Victims are afraid to go to the police. Even if someone goes to the police, these apps are all running from China, and they can't do much about it. From the BBC article: "The people running the apps gained access to all the contacts on his phone and his pictures, and have threated to send nude pictures of his wife to everyone on his phone."[1] It is a horrible system, and Google doesn't care about poor people getting scammed. Some victims even committed suicide because of the threat of releasing their private data. [1]https://www.bbc.com/news/business-61564038 https://www.bbc.com/news/business-61564038

nikanj 4y ago
It’s interesting how popular Google products remain, considering their well-earned reputation of Never Giving A Shit
- rahimnathwani 4y ago
  "these apps are all running from China" I'm curious about this. Can you please tell us more?
  - nixcraft 4y ago
    The servers for these apps are in China, but the owners are in other countries, Mexico, India, China etc. So it is hard for police to get a warrant to shut down servers when crossborder issues are involved. I am not an expert in such crimes, but they make it hard for local police to shut them down.
    - oefrha 4y ago
      If the government can ban TikTok and a bunch of other popular apps overnight, surely it’s not hard to get scam apps removed from Google Play if they cared at all?
      - 4y ago

Biologist123 4y ago

As I understand it, the way these apps work is: 1. The loan interest rate is set relative to a base default rate of a population sample of lenders. Therefore very easy to predict capital return, but means interest rates are usually high to cover high rate of defaults. 2. Defaulting loans are sold to local debt collectors for collection, who presumably are quite ruthless. 3. There are a few companies which white label the software needed to run this sort of scheme, so presumably the operator only has to drop in capital. If you have further information on how these businesses work, please respond!

nerdponx 4y ago
The article also states that the apps deliberately obfuscate the costs (50% fee deducted from the loan amount) and terms (due in 7 days with 300% interest) of the loan.
xtracto 4y ago
I built the system of reputale a Mexican startup that did online lending, so I have some insight: 1. This is a real problem in Mexico: people complain about high interest rates. However, for these kind of bullet loans , you see 30% of default in the FIRST loan. And back when we were starting on 2013-14 we had up to 70% of default due to fraud. So, with around 30% 1st default and about 15% 2nd default, we created revenue models that considered that, CAC, cost of funds and opex to define the interest rate... that very high APR really was not making people rich overnight. See, one problem in Mexico is that defaulting in a loan is not a crime, so theres legally NOTHING a lender can do to make you pay if you decide not to. The only repercussion is that you Credit Buro gets tainted, for 6 years. I've read of people that get a $100,000MXN loan and then just change phones, move apartments and wait for 6 years to clean their credit buro. 2. Default loans deffinitely are sold, for cents to the peso. But usually only the ones that are very old. Now, there are different types of collection agencies. Where I worked, we tried to he very reputable so we only chose the least shady ones. But in reality the only thing they could do is call you. Even calling your provided references is illegal. We actually stopped asking for references IIRC. 3. I dont know but dont doubt it. BUT, have a look at Fineract/MifosX: an open source loan management system. Its relatively easy to setup a lending operation using that. It's pretty comprehensive. All in all, there are very shady app/online lending services in Mexico. But it is nothing exclusive of the internet. Way before this, you heard of lenders that would do "collections" by getting some tough guys from prison (yup, in some prisons they can get out for the day like nothing, for some cash) and knocking at the debtor's door with baseball bats, wrenches or any other hard weapon . If you didn't pay they broke your legs or worse. That now it happens online is only the natural evolution of the shithole that is my country, unfortunately.

donohoe 4y ago

It references this story which to me is very troubling: Contreras told the story of one woman who fell victim to these schemes named Maria. After Maria took a loan, agents for the app iFectivo sent her 13-year-old daughter, her cousin, her nieces, and more than a dozen of her other contacts a picture of a nude woman with her face photoshopped on. iFectivo told her contacts she had become a prostitute to pay her debts. Full story (referenced in TechPolicy article): https://restofworld.org/2022/mexico-scam-loan-apps/ https://restofworld.org/2022/mexico-scam-loan-apps/ Troubling, unethical, illegal stuff.

fzfaa 4y ago
What calls my attention of this story is that employees of that app would go through the trouble of creating a credible shopped image of her and sending it to all of her contacts. Do they have almost no clients, was the loan particularly big, do they have loads of employees just to do this...?
- nyolfen 4y ago
  alternatively, it was just a real photo from her phone
- thatguy0900 4y ago
  It is not hard at all to create a credible head swap photo shopped image. Probably a one man job to do it to everyone they want to do it too.
  - bornfreddy 4y ago
    With ML, it can be (unfortunately, in this case) automated. One victim - lots of work. Thousands - almost the same amount.
- toxicFork 4y ago
  It was just the next jira ticket
- duxup 4y ago

photochemsyn 4y ago

The whole microloan program has been hyped for over a decade now, but as this story shows, the outcome more often than not has been more like mafia loansharking than actual economic development under the entrepreneurial free-market model. This can be explained via the notion that "enterpreneurs without lawyers end up getting screwed over more often than not" and the people who get these microloans just can't afford to hire lawyers to protect themselves. While it's a right-wing trope, the microloan program has been heavily promoted by the likes of the Soros-Omidyar crowd, with the typical humanitarian patina covering what's really just predatory capitalism: "We have seen what microloans can do at the individual level and are excited about bringing that same opportunity to small and medium businesses," said Jim Bunch, Director of Investments at Omidyar Network. Here's another expository write-up of the phenomenon, in Cambodia. Looks very similar to India, Mexico, etc. https://www.aljazeera.com/economy/2019/8/6/cambodias-micro-loans-a-form-of-predatory-lending https://www.aljazeera.com/economy/2019/8/6/cambodias-micro-l... [edit] for more on background on this global trend and its origins (2007) > "Microcredit is the newest silver bullet for alleviating poverty. Wealthy philanthropists such as financier George Soros and eBay co-founder Pierre Omidyar are pledging hundreds of millions of dollars to the microcredit movement. Global commercial banks, such as Citigroup Inc. and Deutsche Bank AG, are establishing microfinance funds. Even people with just a few dollars to spare are going to microcredit Web sites and, with a click of the mouse, lending money to rice farmers in Ecuador and auto mechanics in Togo... Wealthy philanthropists, banks, and online donors aren’t the only ones fascinated with microcredit. The United Nations designated 2005 as the International Year of Microcredit..." https://ssir.org/articles/entry/microfinance_misses_its_mark https://ssir.org/articles/entry/microfinance_misses_its_mark

AlbertCory 4y ago
Whatever else it is, it isn't new. The Grameen Bank in Bangladesh was first publicized in the West 20 years ago. It also isn't "predatory capitalism." Rather, it's NGO-ism. It's charitable donations from liberal-minded people that drive it.
- photochemsyn 4y ago
  Every time I hear these notions of well-meaning billionaire philanthropists set on making the world a better place, I'm unavoidably reminded of this short passage in Conrad's Heart of Darkness: > "It appeared, however, I was also one of the Workers, with a capital—you know. Something like an emissary of light, something like a lower sort of apostle. There had been a lot of such rot let loose in print and talk just about that time, and the excellent woman, living right in the rush of all that humbug, got carried off her feet. She talked about ‘weaning those ignorant millions from their horrid ways,’ till, upon my word, she made me quite uncomfortable. I ventured to hint that the Company was run for profit." If it was real philanthropy, the model would be one of no-strings-attached grants, delivered via a competitive process open to people in disadvantaged communities - not a model based on loans which must be repayed with interest, with collection agencies lurking in the background to go after defaulters in this manner. This is why people are better off cutting deals with the hard-nosed businesspeople who spell out risks and conditions upfront, rather than the liberal do-gooder snake-oil merchants with their ulterior motives.

siliconc0w 4y ago

It's a shame because I think there is a legitment use-case for micro-lending but there needs to be regulation and enforcement. Also asking for those kind of wide permissions should trigger some kind of additional review - a scam-filled untrusted ecosystem hurts all app developers.

AlbertCory 4y ago

While there is plenty of room for doubt about micro-lending (see [1] which I hosted, by Hugh Sinclair, a guy who's actually been there in the field), I don't think it's fair to call these scams "micro-lending." Maybe they're taking advantage of the favorite PR that micro-loans get. In the micro-lending plans that Oxfam and other legit charities back, borrowers meet in person with the lenders, and no hounding takes place. Most of them pay their loans back promptly. However, the stories about "poor woman buys a sewing machine; lifts her family out of poverty" are mostly just feel-good PR to milk the donors. More often, they buy a stall in the market to sell produce, and there's only so many stalls the market can support. The real scandal of micro-lending, as Hugh explains, is that the interest rates are scandalously high, and the lenders are mostly using it as a way to buy SUVs and milk the First World donors who want to feel good. These scams are not "micro-lending." [1] https://www.youtube.com/watch?v=rhdZ2RfmiXo https://www.youtube.com/watch?v=rhdZ2RfmiXo

lupire 4y ago
Microlending is also a scam, but a different kind -- just normal predatory high interest loans.
- AlbertCory 4y ago
  Yeah, the difference is that "microfinance" manages to give itself a high-minded image and attract big bucks from Western donors, and go on 60 Minutes. While these payday lenders are universally regarded as scum. But they're not really all that different, as you point out.

leach 4y ago

Be aware of other scams too, some women are sending nudes to people and screenshoting theirs in hopes of extorting. Really have to just stay frosty all the time now.

CharlesW 4y ago
“Sending nudes” is the “committing private keys to a public repo” of dating.
- leach 4y ago
  Yep, pretty much. Crazy what some people will do to just not work a regular job.

syntaxing 4y ago

100% serious question, does iOS prevent this? Or is the demographic of iOS vastly different?

netr0ute 4y ago
If you are getting a quick, small loan in Mexico, you probably don't have an iPhone because they cost multiple times as much as an Android one. So, it's not worth it to make these apps for iPhone users because that demographic is totally the opposite of what you want.
- xtracto 4y ago
  I dont know why you are being downvoted. I know what You wrote is fact. I worked building the systems of such an online lending company in Mexico, and I had to fire my only iOS developer because we saw we dint have enough demand in those devices. Shootout to Jesus, the iOS developer & DJ. He was such a great guy to work for, and really killed me to let him go. He is a great guy :)
  - UlisesAC4 4y ago
    People don't know the demographic that consumes those apps in Mexico. It's true, people who go for these apps earn at most 300 usd per month an some of them with family.
duskwuff 4y ago
Apple does allow personal loan apps, but sets limits on interest rates and repayment deadlines (≤36% APR, ≥60 days) which effectively ban the type of app at issue here. Requesting permissions to all of the user's contacts and photos in a loan app wouldn't pass review, either, and the fact that Apple doesn't permit sideloading is an effective block against the "subway flyer" tactic.
kioleanu 4y ago
More important, Apple reviews all new apps going into the App Store. One of the rules is that you're not allowed to request more permissions that what the app actually needs. A loan app requesting all this info would never fly because it won't pass the human review. Also, it would be incredibly hard, if not impossible, to reupload an app that was banned under a different name - they have automated checks for this

londons_explore 4y ago

To be vulnerable to this kind of extortion, there has to be something about your life, true or false, that you'd prefer people not say about you. I was thinking, and I don't think there is anything that I wouldn't want said to my friends or family. Everything that could be said is either plainly untrue, or wouldn't sufficiently bother me to change my behaviour. I wonder how other people get into positions where this isn't the case for them?

dymk 4y ago
Be gay and live in most parts of the world
npteljes 4y ago
One of these vulnerabilities is living in Mexico. From TFA: "He starts getting this very, very graphic images of dismembered bodies. You know, real images probably taken from those websites that have pictures from drug dealers and the terrible things they do here in Mexico. So he’s being sent this true, these real pictures. And of course any Mexican will immediately get very scared, very intimidating, thinking that organized crime is behind something. You don’t want to be their target. You start fearing for your life. They have your address. They have information on your children, your wife, he’s very scared."
pdntspa 4y ago
> there has to be something about your life, true or false There are plenty of false things that anyone can say about literally anyone, including you. If the lie is well-crafted enough, good luck defending against it.
- londons_explore 4y ago
  Perhaps give some examples? Everything I can think of is either easily demonstrably false, or I just wouldn't care, because my friends and family either wouldn't believe the attacker over my word, or because it just isn't something that matters to me.
  - 4y ago

wejick 4y ago

This kind of scam was so rampant in Indonesia until the government took strong stance, effectively sweeping the practice across the country. It's like Google doesn't even care about this things, in contrary they're so fast blocking and suspending app submissions that against their bottom line, like digital goods and payments methods.

xtracto 4y ago

Tangentially related to part of the text in the article : A lot of these and other apps ask you to share documents, camera, mic, gps, and other access from your phone . The problem is that several of those wont work if you reject that access. Even worse, Mexican government passed a law that made it compulsory to monitor your GPS position for Banks and other money related companies, so doing relatively common bank transactions require you to lose your privacy. Given these blatant privacy violations, I wish mobiles had the option to "mock" data for those sensors. Share files? Sure, give access to a jail like bkank file system. Share mic? Sure, give access to a white noise generated stream, same with video/camera. Share gps? Give some mock location, etc. That's what a privacy enabled device would do. I wonder why hasn't this even been implemented at the browser level.

biggerChris 4y ago
Do you have an iPhone and if it’s jailbroken; if Yes. Do you want to implement some of these ideas into Apple lockdown mode Api? Let me know if it’s something you are interested in?
josephcsible 4y ago
> The problem is that several of those wont work if you reject that access. For all of the crazy rules Google has for the Play Store, I don't know why they don't have one against this.
- bongoman37 4y ago
bornfreddy 4y ago
Afaik this is what MicroG does, though their aim is different. They mimic Google services responses so that the apps work without G proprietary libraries and services but I don't think privacy is their stated goal (I'd love for someone to correct me if I'm wrong, not using MicroG myself).
_HMCB_ 4y ago
GPS position sharing is a little frightening isn’t it? I mean, if some of these apps are cartel or organized crime related, this could become a real physical threat.

sandGorgon 4y ago

>Last year, a Reuters investigation by Rina Chandran found dozens of lending apps in India that appeared to violate Google’s policies against short-term loans just FYI - this is contrary to the product and the law of India. Google is not the regulator. For example Manndeshi foundation runs 24 hour loans for women vegetable sellers - who take a loan in the morning and pay back at night. Google Play "ethics" is US-centric. It does not take into account the realities of the local demographics. for example sub 90 day loans are illegal on Play - a lot of microfinance in India/Bangladesh is sub 90 days. What ends up happening is demonisation of everyone not playing by Google Play's rules and gets termed as "predatory".

A4ET8a8uTh0 4y ago

I wonder if this has to happen in US so that people start treating privacy as a real issue and not tinfoil hat rant type complaint. Whenever I try to engage in this conversation, 'I have nothing to hide' is a very common refrain. At that point I typically ask for their phone to rummage through. Oddly, that is the moment they hesitate. It is not ok for me to have this information, but a faceless entity connected only by an app? No problem. I fear for the human race.

InfiniteRand 4y ago

Here's a question, are these shady apps necessarily worse than the village loan shark which is where the desperate turn to money otherwise? To some extent, the market for no-questions-asked risky loans is similar to gambling, drugs and prostitution, it's a perennial vice that's impossible to stamp out. Is formalizing it better than not formalizing it?