CreditVidya.com Screenshot

BENGALURU, Karnataka—An Indian start-up that few outside the fintech industry would have heard of embedded tracking software inside popular apps, including one that streamed Sai Baba stories and another that streamed Ilaiyaraaja songs, to scoop up sensitive user data including GPS locations, and business SMSes from ecommerce sites and banks to monitor spending activity, personal contacts, and much more, HuffPost India has found. CreditVidya, a Hyderabad-based fin-tech company, ran this snooping code (technically known as a Software Development Kit or SDK) for several months in 2017 until a new version of Google’s Android operating system made it harder to scrape such data. The data, scooped up from users, was used to power CreditVidya’s self-learning algorithms that help lending companies determine the credit-worthiness of loan applicants. (Fin-tech is industry speak for financial technology, a fast growing category of software firms). SDKs like the one developed by CreditVidya are called “Middleware”. If you assume an app is like a machine, middleware would be a component or a cog in that machine. As apps grow more complex, developers often rely on middleware developed by third parties, increasing the risk that user data is scraped and sold on for a fee. For the latest news and more, follow HuffPost India on Twitter, Facebook, and subscribe to our newsletter. Upon installing these apps, many of which were developed by a third party app developer call Winjit, users would have been asked for access permissions that are increasingly common and intrusive, but would have had no idea that their personal data was being scraped and sold further in a manner that could affect their credit-worthiness. “Even though there might not be proper notice / informed consent, at least it’s understandable that lending apps that user uses is downloaded consciously and some might have knowledge on the fact that app,” said Srikanth L., a contributor to Cashless Consumer, a collective studying digital payments and fintech businesses in India. “The Creditvidya SDK was also found in a Sai Baba app, Ilaiyaraaja Hits app and other music apps of popular record labels with its SDK where user is clueless about this background data collection.” Thus a user could consent to an app collecting data without knowing how such data would be used. CreditVidya, Srikanth said, “used the data from unsuspecting users as part of the huge database it uses to generate the trust score, but there is opaqueness about where this data comes from and how many data brokers were engaged in trading personal data with companies like CreditVidya.”

Worse, given that many of these algorithms are proprietary and hence un-auditable, it is unclear if these credit-rating apps even work. Users could find themselves denied credit, or charged high interest rates on the basis of purely arbitrary decision making by CreditVidya algorithms trained on data scraped on the sly. “Given how untransparent the industry is,” said Fredrike Kaltheuner, from the Data Exploitation Programme of Privacy International, a privacy-focused global non-profit organisation that investigates and advocates for user privacy. “It’s hard to say if this information is actually helping anyone get a loan. There are a lot of companies in this space now, but their algorithms are a black box, and the data they use is usually not clear either.” CreditVidya and Winjit did not reply to HuffPost India’s emailed requests for comment. We will update this story if the companies share a response. Meet CreditVidya CreditVidya does not offer loans directly to consumers. Instead, the company offers its services to over 50 lenders, ranging from banks like Axis Bank, DBS, Yes Bank, and financing companies like Tata Capital, TVS Credit, and Hero FinCorp, according CreditVidya’s website. This means that when consumers approach these companies for loans, CreditVidya’s software helps determine if the loan should be given or not. To do so, the company compares a given loan application with its giant database, to evolve something called “Trust-score” that, the company claims, determines if the applicant is likely to pay back the loan. The company raised Series A funding from Kalaari Capital, and Matrix Partners joined in its Series B round. It has raised a third round of funding as well, led by the Bharat Innovation Fund. One of the partners at the fund is Sanjay Jain, former Chief Product Officer at the UIDAI, and a volunteer at Bengaluru-based think-tank iSPIRT. In a blog post, Kailash Nath, a Senior Associate at Bharat Innovation Fund wrote that CreditVidya processes over 500GB of data every day. It uses data related to over 10,000 parameters to assess creditworthiness, and plugs its SDK into the lenders’ apps, to make the decision to approve the loan or not. He added that the platform has processed over 25 million profiles so far. The post does not mention anything about the sources of this vast amount of data. “It’s not necessary that the data is coming from nefarious means,” said Saravanan K., a Bengaluru-based security consultant. “There could be any number of ways in which the company has acquired this data, and a lot of it is above board — people aren’t always aware of what they are signing up for, where they are giving their data.” “Your phone number acts as a unifying element, and then the amount of data that becomes available about you simply from offline sources will boggle your mind. But getting data directly from your phone can be very valuable, because it’s happening in real time and gives a very clear picture of what you are doing.”

Amazon App Store Screenshot

The companies doing all this data gathering are keeping quiet about the matter. For example, Srikanth found CreditVidya’s SDK in a number of applications made by Winjit, which has developed a number of music apps, including for huge companies like Times Music. However, the nature of the relationship between the two companies is not clear; nor have they made any public statement on why Winjit’s apps on music carried CreditVidya’s lending SDK. When a user downloaded a Winjit app, it would create a profile linked to their phone number, and then update this, analysis of the SDK by Cashless Consumer showed. APIs in the SDK revealed code for the user being initialised, and the data being updated. A report by Aayush Rathi and Shweta Mohandas for the Centre for Internet and Society that researched the privacy commitments taken by Indian fin-tech companies also goes over some of this ground. “The unprecedented growth of this sector with a number of players that have an amorphous nature (not banking entities) has concomitantly come with regulatory challenges around inter alia privacy and security concerns,” Rathi and Mohandas say in their report. “For instance, a survey of 1,300 senior executives in the global financial services, and fintech industries revealed that 54% of respondents identified privacy and data protection as barriers to fintech innovation.” They also noted that a study stated identified that 79.4 percent of the surveyed participants stated that they did not read the privacy policies and only 11 percent of them stated that they understood them. They also wrote that another study conducted on the most popular apps in India also observed that the privacy policies were drafted to protect the service providers from liability, rather than to help the consumers. What’s in the SDK? Analysis of the SDK by Srikanth suggests CreditVidya collected the following info: Mobile IMEI

All contacts

Measured frequency of SIM changes to see if this is a person who frequently swaps SIMs

GPS location

Business SMS to monitor spending activity

Wifi ON/OFF Given that CreditVidya talks of over 10,000 data points, it’s safe to say that this is not all the information that the company is collecting about potential borrowers. What’s particularly worrying in this case though is how the information was being collected through applications that have nothing to do with lending. “They are collecting user specific data, and also location specific data for demographic mapping,” said Srikanth L. of Cashless Consumer.

Getting data directly from your phone can be very valuable, because it’s happening in real time and gives a very clear picture of what you are doing.

Kaltheuner, from Privacy International, said this kind of arrangement with SDKs is not uncommon. “A lot of researchers have come across such arrangements,” said Kaltheuner, “but it is very hard to find actual evidence.” In that sense, the work done by Cashless Consumer is very important, she added, as it shows how companies are quietly collecting user data. “But a bigger concern is the use of pre-installed applications for tracking,” she added. “These apps are installed by the phone manufacturers, or by the telecom companies, and that’s how you get very cheap smartphones being subsidised by third party trackers.” “These pre-installed trackers often don’t need to ask you for permission before getting access to your data, and they can have access to deeper information than the third-party trackers,” she said. This is made worse by how opaque the industry is; information flows in only one direction.” “Middleware is very hard to track because there are a number of ways in which companies are going around regulations. Even if a developer doesn’t mean to take your data, it’s often very hard to know what all an SDK is going to do. This is a systemic problem in the industry, with a lot of reliance on third party software.” Standard procedure in India Although a number of developers who spoke to HuffPost India confirmed that practices like these are common in the Indian ecosystem, they refused to go on the record, explaining that this is normal business practice, and speaking out about it will lead to a loss of opportunities in the future. “The big change was Google cracking down on this stuff, but otherwise it’s all over the place,” one developer based in Bengaluru said. “Like, there’s a company in Bombay whose business model is to offer its SDK for apps, and it basically gives you solutions like OTP capture — but it also keeps tracking SMS data afterwards, which is used to build a financial profile. And they offer a cut for doing this, so it subsidises the cost of developing the app.” Another developer said that IBM’s analytics middleware has also created similar problems but refused to give any details fearing reprisals from the company which has offered his startup projects in the past. However, IBM denied the allegation—a representative said that it would require more technical details from the developer to give a detailed response, but the developer refused to share further information. But the problem is actually not limited to India. In May 2019, mobile app developer QuarkWorks found that one of its apps on the Google Play store was flagged and removed for violating store policies. According to Devun Schmutzler, Native Mobile Developer QuarkWorks, Google said their app was violating Android’s advertising ID policy. Google had identified that the app collected and transmitted the Android advertising identifier, which could be used to identify and target a user.

QuarkWorks Blog Screenshot