Instant loan apps turn out to be new debt traps
Hyderabad: A 24-year-old woman reportedly committed suicide at her residence in Guntur district, Andhra Pradesh on Monday. In a recorded message before taking the extreme step, she said she owed money to an instant loan app and that her debt collectors were harassing her to replay the amount, threatening to post her morphed nude photos online and send them to loved ones. The victim described his ordeal in a video recorded in selfie mode.
The number of instant loan applications is increasing, trapping many people across the country. Some of the applications used in the state, according to different FIRs, are Ocean Rupee, Life Wallet, Maloo Wallet, Elephant Cash, Box Cash and Dutta Rupee are operated by Chenchaoping (a Chinese national), Creditbus, Clear loan (Dynamic loan, loan pocket, easy credit, Finfarm, fast rupee, rupee now, credit star), Credit King, express loan, Money Stand, Infinity Cash, Cash bee, APna Paisa, Quality cash
In Telangana and Andhra Pradesh alone, several people have taken their own lives alleging they were harassed by recovery officers deployed by these loan apps, according to police. These loan apps target small traders, low-wage workers and housewives who have lost their income due to Covid. They advertised on Facebook that they were providing instant loans with very low interest rates without collateral, easily attracting people in need of money.
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However, if they cannot repay their loans with daily interest, the torture begins. Investigators say lending app operators use threats to defame customers in front of friends and family if they don’t replay the full amount.
Their usual modus operandi is to threaten clients with transforming their photos and sharing them with family members and friends. Unable to resist this pressure, many women commit or attempt suicide. Over the past two years, numerous such incidents have occurred in Hyderabad, Vijayawada and Guntur, according to local police records.
In December 2020, police raided several locations in Hyderabad after at least three people died alleging they were harassed by loan applications. It was discovered that this mafia operated a large network and a call center of 600 people in Hyderabad. After the Hyderabad incident, the police conducted raids across the country and arrested 17 people at different locations. Six cases were reported in Hyderabad in May 2022.
The Telangana government has expressed concern over instant loan apps. Last year, 61 cases were recorded in Telangana. The number has increased several times this year, with the police having already received 900 complaints. So far, 107 cases have been recorded. The Telangana government has asked the Reserve Bank of India to set up an organized system to regulate these apps.
(With contributions from ABP Desam – This is a Telugu platform of ABP News. For more news, commentary and the latest happenings from two Telugu states, follow https://telugu.abplive.com/)