Instant loan apps are a nightmare and people are raving about them, especially in this pandemic
Do you want everyone in your contact list including family, friends, coworkers and more to receive phone calls and WhatsApp messages from random numbers asking them to remind you that you haven’t refunded? a loan that you recently took out? If your answer is no, here’s a tip: don’t take out a loan from that random app you found online.
The full extent of the reach of these obscure and unregulated applications in India has yet to be identified. and the authorities are only beginning to probe them.
The investigation that began in Telangana has since spread to other states such as Tamil Nadu, Karnataka and Kerala where similar cases have been filed.
Police in Telangana alone have filed at least 50 cases and arrested 29 people, including three Chinese nationals, to date.
The cases were recorded after at least five people, including a software engineer, allegedly ended their lives following harassment from loan providers to repay him.
These app-based loan providers that are not registered or fall under RBI regulations target employees or students with short-term loans., which often have a high interest rate.
Since this is instant approval, without any paperwork or other usual formalities, people who are in dire need of cash will fall for it.
The loaned amount is credited to the applicant’s account after deduction of the “administration fees”.
Problems start when borrowers fail to repay on time
The problem begins when the borrower does not repay the loan on time. It starts with callback calls, which can be mild or rude depending on the amount.
If the borrower still does not pay the amount, the tone of the appeals turns to abuse and harassment.
And these calls will not be limited to the borrower. Since they already have access to the phonebook and call history through the permissions granted to the app during installation, they can use it to identify the borrower’s relatives and start calling them with threatening messages. .
Chennai saw four people get arrested
In Chennai, where four people were arrested by police in connection with the case for providing more than 1,000 SIM cards to loan applications.
Investigations revealed that the SIM cards used by the defendants were fraudulently purchased by managers of a city-based digital company with the help of two people, including the territory sales manager of a mobile service provider.
They purchased 1,100 SIM cards and the standard procedure required for issuing SIM cards was not followed.
Mobile numbers, used in loan application operations, were used to “intimidate and abuse” the person who failed to repay and their cell phone contacts.
Even Kerala has become prey
In Kerala, the police hi-tech cell said it has encountered several cases where people who have taken out loans and their families have been the victims of an avalanche of abuse and harassment as a result of these loans.
According to some of the victims, their loan amount doubled and tripled in a matter of weeks and they were forced to take out another loan from another app to pay off the first loan, thus finding themselves in a debt trap.
As the state investigation continues, police are hiring data analysis experts to study the big data, as a preliminary investigation into the financial transactions of online lending application companies has revealed transactions of 1.4 crore worth almost Rs 21,000 crore.