Do Not Fall Victim to Instant Loan App Scam
Written by – Gurjot Singh Kaler
One of the latest scams doing the rounds is instant loan app scam. These loan apps are nothing but well-oiled and organized extortion rackets being operated from outside India. The Telangana Police in its massive crackdown against such fake loan apps in December 2020 indicated transactions of more than 21,000 crores. Similarly, in 2021, the Enforcement Directorate filed a complaint with the Hyderabad Central Crime Station (CCS) about a 1400 crore transaction related to these fake loan apps whereby money through Hawala route was siphoned off to offshore destinations like Hong Kong, Malaysia, etc. In July 2023 also, the Intelligence Fusion and Strategic Operations (IFSO) Unit of Delhi Police’s Special Cell has busted various modules of instant loan applications having Chinese connection whereby more than 500 crores have been sent to China through Hawala route or cryptocurrency. Many poor and gullible people have fallen victim to it and suffered irreversible consequences. The victims have not only lost money but also faced social, mental and psychological trauma due to these fake loan apps. These loan apps are mostly Chinese apps and can be downloaded from Google Play store and these come with various names like instant loan, quick loan, AG Loan, “Money Box”, “Loan Gram”, “My Bank”, “Coco Cash”, “Cashpot”, “Need Rupee” and “Panda Rupee”, “Cash Advance”, etc. Many of these fake loan apps have been banned by the Indian government but still, these keep on operating with impunity. Even though Google keeps on deleting and banning these fake apps, yet, they keep on appearing with some other names. These fake loan apps have a sinister plot and in some parts of India, the victims have even committed suicide due to the unbearable mental pressure put by the recovery agents/goons. The loan app scams operated at their peak during the covid phase
lockdown when most of the people lost jobs and were in dire need of money.
Once the victims download these free and easily available Chinese loan apps from the Google Play Store, these loan apps ask the users to give them the access to their contact lists and pictures and videos stored in the gallery of the phones. Then, the victim is asked to upload their bank account details as well as Aadhar Cards and PAN cards on these loan apps. Once the victim clicks and accepts the terms and conditions of these loan apps, a certain amount of money as a loan amount is actually transferred to the victims’ bank accounts. After taking a loan, some of the total amount is deducted as processing fees. If the remaining amount is not paid within the stipulated time the interest and penalties together take the repayment to 200 percent of the loan amount.
Everything looks hunky-dory till now except the fact that once few days have passed off, the victims start getting calls and messages on their Whatsapp and phone to repay the loan amount. The tricky catch here is that the amount of money being demanded from the victims is much higher. For instance, if the victim had been given a loan of Rs. 4000/-, the scamsters usually demand Rs. 8,000/- in return. If the victims start questioning or arguing, the scammers threaten the victims to morph their personal photos in an obscene manner and make them go viral my sending them to their contacts in the phone or even threaten to upload their vulgar photos and videos on social media platforms in order to mentally pressurize them. The victims are also threatened with sexual assaults and intimidated that their nude morphed pics would be uploaded on adult websites for
the pornographic customers to call them and harass them. Since these loan app scams had already got the access to the users’ media gallery and contacts earlier, it becomes very easy for them to manipulate those resources now. As a result, many victims get fearful of a loss of their social reputation and thus, end up meekly complying with the illegal demands of the fake loan scammers. Some of the users get mentally perturbed due to the social stigma and fall into the vicious debt trap of these scammers. If the victims fail to pay the money, these scammers also start calling the family, friends and acquaintances of the victims and use utterly foul and filthy language to add salt to their wounds. The recovery agents also threaten the victims of lowering their credit ratings and lodging police complaints against them. If you are a guy, these conmen photoshop you in a news report of a rape case and forward that message to all his contacts. If the borrower is a girl, her photo is morphed into pornographic images and shared with her entire contact list. Moreover, these culprits start circulating the victim’s phone number as an escort. Their ultimate aim is to instil deep fear and anxiety in the minds of the victims so that they are able to surrender themselves and end up paying the extortion amounts to these agents. The accused running Chinese apps make a WhatsApp group of the contact details of the victim. The women contacts are sent objectionable messages. All the contacts of the victim are called by their agents who falsely inform them that the loan-taker had made them guarantors. This is the prime modus-operandi opted by Chinese nationals to extort money from Indians through these loan apps. Due to fear and stigma, many victims end up paying money to scammers in different bank accounts opened against fake IDs. The ill-gotten money which is collected gets diverted to specific bank accounts and then, ultimately sent to China through Hawala route or after purchasing cryptocurrencies. Poor and needy people who had taken small, paltry amount of loan such as Rs. 5000 or Rs. 10,000 are forced to repay in lakhs. Since the Indian police has launched massive
crackdown against the handlers of these fake loan apps and horde of scammers are being arrested on a daily basis, these clever scammers are now shifting their recovery call centres to Nepal, Bangladesh and Pakistan. The recent police raids and Enforcement Directorate
operations against these fake loan apps has shown that the owners of these fake loan apps were some front-end Indian entities, for which instructions came from Chinese citizens. They entered into agreements with non-bank financial companies (NBFC) for giving out loans. Each entity had floated several apps that were installed, accessed, used and monitored from cloud-based servers in China like Mad Elephant, Baryonyx Technology and Cloud Atlas Future Technology. The Chinese scammers used forged documents of Indians and made them dummy directors of those entities while generating proceeds of crime.
It is imperative to spread awareness about these fake instant loan apps amongst the masses so that people do not get easily fooled into their tricks.
Here are some precautionary tips to remember to distinguish between fake and original loan apps -
• Remember that the real and original loan app companies would always be registered with the Reserve Bank of India (RBI). Before downloading them from the Google Play Store, ensure to check the registration number of these loan companies from the RBI’s website. All legal lending companies are required to clearly show the same along with their Company Identification Number (CIN) and details of the Certificate of Registration (CoR) with RBI.
• Always read the reviews of these loan apps before downloading them. Most of these loan apps have a very less rating and if you carefully scrutinize the comments on the user reviews, you might come across people who have already been a victim of them. Reading the reviews carefully can help you in preventing yourself become a victim of these fraud loan apps. However, it needs to be noted that in order to target the unsuspecting people in need of quick cash, these shady companies make effective use of digital marketing. If you search for words such as “loan” or “quick cash” in Google Play Store, you are most likely to end up with these apps. Based on your search history, you may even see their ads on Google’s ad network including on YouTube. Surprisingly, most of these apps maintain positive reviews on Google’s repository. These fraudsters use content farms to dump thousands of fake reviews every week to bury the genuine feedback. Therefore, it is important to exercise due caution and apply one’s mind in a careful manner before downloading the apps.
• If a loan app appears to be too good to true, it is surely a scam. For instance, if a loan app does not check a user’s credit history before sanctioning a loan amount, it is a definitive red flag. Similarly, if the loan app does not ask the users for any paperwork t be completed, it is also a sign of luring the potential victims and scamming them. Always get the loan from RBI authenticated and verified lenders.
• If a loan app is asking for unwarranted permissions from the user to access their contact lists and media gallery including
photographs and videos from the phone, it is a sure-shot sign of a scam app.
• Most of the illegal Chinese lending apps do not have any authentic physical address of their company and do not even list their website. If a company doesn’t have a physical address or website, do not download the app. It’s a scam.
Ways to protect yourself if you have fallen victim to these loan apps scam-
• Immediately report the matter to the police or lodge a complaint with cyber police. You can also submit a written complaint online at www.cybercrime.gov.in
• If you get threatening calls and messages from the scammers to repay an unjustified amount of money, simply block them and uninstall the loan app from your phone. Also, revert to factory settings on your phone so that the scammers do not have any access to your phones.
• Tell your contacts that you have been a victim of these fake loan apps and politely request them to ignore the calls and messages of these scammers.
• Be mentally strong and do not let yourself go into depression by getting secluded. Just talk to the people around and share your problems.
• Report the matter to the RBI and also report these fake loan apps to the Google Play Store to be removed. Be a responsible citizen and an aware consumer to educate the people.
Always remember that prevention is better than cure. Beware of such fake loan app scams and protect your hard-earned money.
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