Beware of fraudulent loan apps: CEN police

A person seeking a loan online may get bombarded with endless calls from various loan-based app companies across the country, which also could include several fake ones

Hameed Ashraf | NT

Bengaluru: It is high time people woke up to the fact that there are fake lending apps to which they could very well fall prey and lose a lot more than money.

In July 2021, Kumar (name changed on request), 37, a resident of Hebbagodi, was in need of some money to pay the hospital bills for his wife's delivery. Searching through the app market on his mobile phone, he zeroed in on an app that claimed to provide him a short-term loan at a low rate of interest.

A person seeking a loan online may get bombarded with endless calls from various loan-based app companies across the country, which also could include several fake ones. "I just shared my bank details on the app and applied for a loan of Rs 20,000," Kumar told News Trail. "I repaid the amount and closed the loan in October," he added.

However in December, a man claiming to be an executive from a different app-based loan firm, Hugo Loans, called Kumar asking to pay Rs 60,000, citing the “unpaid” loan with increased interest. "Despite my repeated denial of obtaining any loan from Hugo, the executive threatened me of dire consequences. I told him to do whatever he pleases and disconnected the call," Kumar said.

After two days Kumar got a call from one of his friends who told him that he had received some intimate photos of him. The executive had somehow accessed Kumar's contact list and the photo gallery on his mobile phone and had sent morphed photos to the contacts in Kumar's WhatsApp account whose names started with A.

He started getting WhatsApp messages from Hugo Loan warning him to clear the outstanding loan after which he approached the Cyber Economics and Narcotics (CEN) police in the city for help, and registered a case. Another victim of a similar crime is one who lives with her family in Govindaraj Nagar and is employed with a private firm.

She said seven months ago she was in desperate need of money, so made a few enquiries on her phone, following which she received a link for an instant loan. The link was to apply for a loan of Rs 10,000, which was to be returned in 90 days. As she was in need of the money, she clicked on the link to apply for the loan.

However, after completing the formalities, she received only Rs 2,000 as the loan amount. Not only this, executives of the company started calling her from different numbers for not paying back the money. They started “blackmailing her to return Rs 5,000 immediately”, threatening to otherwise send her family, friends and relatives her nude photos.

In order to get rid of these blackmailers, the victim paid them more than the loan amount in a span of two months. When the harassment still did not stop, she approached the police. These loan rackets primarily operate via phone apps easily downloaded either on the Google Play store or through a shared link.

Offering easy loans with no paperwork, as low as a few thousand rupees, the loan app hacks the user’s phone, steals all data and contacts and then begins a tormenting cycle as representatives of the loan apps employ high-handed collection strategies. According to a 2021 report shared by the Reserve Bank of India (RBI), digital lending has seen a more than twelve-fold increase in India from 2017 to 2020.

Last week during the Police Hackathon organised by the Karnataka State Police in Bengaluru, Director General of Police (CID) PS Sandhu had said that a lot of awareness needs to be created on cybercrimes and it is shocking that “so many new cases and scams are coming to light every day”.