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Fraudsters are back in business with loan apps

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Hyderabad: After a break, they are back with different names! Instant loan apps that lend small amounts of money primarily targeting the low income group are back in business. Although, following a law enforcement requisition, the Google Play Store removed approximately 220 apps, the business is thriving and the harassment continues.

More than the interest rate, the point of concern for borrowers is the harassment of debt collectors who resort to social shaming, pushing the victim to a point where they find ending their lives is the only way out. escape social stigma.

The digital lending app has mushroomed in the country after demonetization. The instant loan app targets the lower class who do not have easy access to bank loans. Hence, most of these people fall victim to such loan applications.

The debt collectors harass the victim by sending their transformed photographs to the family members, relatives, friends and acquaintances of the borrowers if they do not pay. After around 20 people ended their lives in Telangana in 2021, police launched a crackdown on the lending app locally called Chinese apps.

Hyderabad police have registered 22 cases and arrested 22 people, including Chinese nationals, in connection with a fraud worth thousands of crores of rupees.

Around 3,000 bank accounts have been frozen. Cyberabad Police and Rachakonda Police have also arrested a few foreign and local nationals for fraud. Police raided call centers in Gurgaon, Bengaluru, Delhi and Hyderabad and seized electronic gadgets and other incriminating materials.

As the 17th century poet Jean de La Fontaine said, “We risk while being too greedy”, instant loan companies are back in business. Now the base is moved to the Philippines and Nepal to hide the Chinese identity.

A senior Hyderabad Police official said the suspects were hosting loan apps on Google Play Store. “Whenever someone downloads the app, companies get consent to access the gallery, contact list and locations before repaying the loans and transferring the amount. Whenever borrowers fail to repay, harassment begins, including social shaming, he explained.

Police recently issued a notice asking people to stay away from instant loan apps and named at least 130 apps.

“It is a well-organized network involving millions of rupees. So if a handful of people are arrested, the main people staying abroad will resume the activity by collaborating with other local people in India, said another police officer.

The police also discovered that profits generated by the company are sent via cryptocurrency to different accounts believed to be held by foreign nationals in different countries.

Investigations by the police revealed that the companies were registering as fake entities and looting customers who download the app from the Google Play Store.

According to an RBI official, if a consumer uses such an app or website, it would collect the user’s personally identifiable information (PII) along with financial data and details which would then be used to compromise the accounts of the user. the user, carry out phishing attacks and identity theft. .

According to RBI officials, most of these apps are absolutely illegal. “According to the applicable laws, any loan company must be registered as a bank or non-bank financial company (NBFC) and obtain a license.

The Reserve Bank of India will soon come up with a comprehensive regulatory framework for digital lending. Separate legislation to prevent illegal digital lending activities as well as the creation of a self-regulatory body (SRO) covering participants in the digital lending ecosystem are also likely to be proposed.

Some tips to protect yourself from loan application companies:

  • First, check the physical address of the business; consult the website and applications (App Store/Play Store) before applying for a loan;
  • Do not download DMZ or APK files from websites, social networks or messaging platforms.
  • Download only from App Store or Play Store
  • Look for secure payment (https://—URL with a padlock symbol)
  • Never share OTP/PIN numbers in any form with the buyer or seller;
  • Never carry out the payment transaction while you are on the phone;
  • Do not click or fill in the short links provided by the scammer;
  • Do not fill in the Google form links provided by the scammer
  • Never scan QR codes; If you scan, it means money is deducted from your account