Instant Mobile Loan App: Complaints Rise by 376%, Pune Cyber Police Says
Debt, threats from loan sharks and desperation led a 24-year-old woman to murder her own grandmother and steal her gold ornaments on Tuesday morning, raising serious concerns about the racketeering of tricking people into contracting drugs. instant loans via mobile apps only to then extort money from which has gained momentum since the Covid-19 pandemic.
According to data shared by Pune cybercell, complaints of harassment through instant loan apps increased by 376% after the Covid-19 pandemic. In 2019, the cybercell received 322 complaints about instant mobile loans, increasing to 837 in 2020; 928 in 2021; and finally, 3151 in 2022.
Kumar Ghadge, Pune Cyber Cell Police Inspector, said these mobile apps pay out even small amounts at much higher rates (12-15%) than the market. They do not follow the strict procedures followed by banks before disbursing loans. Customers just need to fill an online form with the details after downloading the app. It is important to note that customers must give access to their cell phones, contact lists and cameras to the lending company and the same is then used against them. Some of these apps even fetch interest on a daily or weekly basis. Loans are disbursed for a period of 15 days or one/two/six months. If someone fails to repay the loan on time, the amount increases in compound interest and that is where the trouble begins. According to the police, the loan providers in such cases make abusive calls to all the numbers on the customer’s contact list. In some cases, they take the customer’s photo/video using their camera and post edited versions on social media sites to defame them. According to the Pune cyber cell, this tendency to provide instant loans and extort money has increased. In Pune alone, more than 3,000 complaints were received in the first eight months of 2022.
Bhagyashree Navtake, Deputy Commissioner of Pune Cyber Cell Police, said, “Yes, complaints are increasing and given the relaxation of various standards and instant money, many people are getting trapped. However, we urge people not to download such apps. They can legally apply for loans instead. Navtake urged those facing such harassment to contact the nearest police station for assistance.
Another cyber cell officer from Pune said that almost all such instant loan apps are illegal and tend to violate the lending standards prescribed by the Reserve Bank of India (RBI). The central government and RBI should ban all such apps, the officer said. The Pune cybercell has urged people to first verify the credentials of the instant loan app developer before downloading the app. There are 577 financial institutes listed by the RBI that can lend money to people.
An 18-year-old student from Shivajinagar had applied for a loan of Rs 2,000 for seven days to meet his personal needs. He had to repay 5,000 rupees, including principal and interest, after seven days. Somehow he didn’t return the amount on time and started getting threatening calls from mobile app reps as early as 6am. One day, the lender’s representatives shared his makeover video with him and threatened to go viral on social media to defame him.
Last year, Mahesh Mane from Warje-Malwadi applied for a Rs 10,000 loan on a Chinese instant loan app. After he failed to repay the loan amount, first his friends and family and then his office colleagues started receiving abusive calls from representatives of the loan provider. Mane managed to repay the loan but remembers the experience to this day.
In January 2022, a 45-year-old woman from Hadapsar downloaded a similar Chinese instant loan app and applied for a loan of 25,000 rupees. The loan amount was credited to his bank account within a day without any documents. When she failed to repay the loan amount, she started receiving abusive calls. A week later, a morphed video of her was shared with her loved ones by an unknown number.