Loan tr’apps’

Lure of easy and quick finance is landing many people in nets well laid by some unscrupulous lenders who don’t think twice to harass and humiliate borrowers to extract their pound of flesh

Updated - July 15, 2022 05:08 pm IST

Published - July 15, 2022 01:14 pm IST - VISAKHAPATNAM

File photo for representation

File photo for representation | Photo Credit: Getty Images

In November 2020, 25-year-old Mandava Ahalada of Gajuwaka, Visakhapatnam, was found hanging from the ceiling fan of her house. The bright young woman dreamt of studying MBA, taking up a good job and uplifting her family from poverty, but a promising career was cut short, and as per the police the persons to be blamed are the recovery agents of a loan app company, who mounted immense pressure on her for the repayment of a loan that she had taken to fund her studies and clear some of the debts of her family.

The mental pressure was created even though she had cleared 80% of the loan. The police had arrested four persons in the case, all of them loan recovery agents hailing from Maharashtra.

Modus Operandi

Messages are sent to mobile phones promising quick loans with bare minimum formalities. This entices a person in financial stress to go for it and all they have to do is to download the app and fill in the requisite online form.

“Incidentally, the disbursement of the amount is fast, but it is done only after the loan app company officials collect all the personal details of the applicant, including their social media accounts, and here lies the mother of all problems in such cases,” says Commissioner of Police Ch. Srikanth.

As long as the payment is on time, there is usually no issue. The problem starts when there is a default and the company tries to squeeze more money by way of imposing exorbitant interest rates or tries to collect a few extra instalments, which the customers resist.

The travails begin with abusive text messages landing on a borrower’s mobile phone. Later, the messages are sent to the person’s friends and relatives. And the worst part is morphed nude images of the victim are sent to his or her social media contacts.

They create a humiliating situation, where the victim either goes into depression leading to suicide or just bears the insults silently. Only a few pick up the courage to lodge a police complaint.

Tough to crack

For the police, investigating the cases that have a cyber connection is a different ball game, as searching for a cyber criminal is like the proverbial finding a needle in a haystack.

The messages come from phones which have no connection with the loan app companies. Tracking a phone is very difficult, as mostly burner phones (old button phones with temporary pre-paid SIM cards) are used.

“At times, tracking such phones, our teams land up in remote places in Assam, Bihar or Uttarakhand only to realise that the address was fake and the messages were routed through a VPN (Virtual Private Network), whose IP address may be in Mumbai,” says Mr. Srikanth.

Legal recourse

“Seeking a legal recourse is again a cumbersome process, as some part of the case falls under IT Act and other parts may come under a white collar crime or a financial fraud,” says Mr. Ramakrishna, legal adviser to the city police.

There is no law to directly handle such cases and different sections have to be invoked, he adds.

To speed up such cases, the cybercrime department has to be strengthened and manpower need to be trained, opines a senior police officer.

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