Predatory lending by instant loan apps has led to a spate of suicides in several states. Many of these apps have been traced to China and Hong Kong, and money laundering channels that use cryptocurrencies have been unearthed. Despite the arrest of several players, including Chinese nationals and Indian accomplices, such apps continue to flood the market. They lure desperate individuals into the debt trap and abuse access to their smartphone data to extort exorbitant amounts. In this series, News18 will shed light on the human cost of the fraud and investigate national security implications of the Chinese harvesting Indians’ data.
PART 3 OF 7
“I have taken loans from various apps… True balance, Mobipocket, Money View, Smartcoin… I am not a bad person, but such a situation has arisen, leaving no option other than ending my life. Please smile when you see my body, I lost the battle of life.” These were the last few words of a victim of Chinese loan apps that humiliate people after getting them into a debt trap. Amit Yadav ended his life in Indore on August 22, along with his wife, a three-year-old daughter, and a son born last year.
Amit’s body was found hanging and the other three were found dead in another room by the police. Officials said Amit was constantly getting threat calls from these app representatives who sent obscene messages regarding his wife to all his contacts.
PART 1 | India May Ban 300 Apps to Plug the ‘Sleaze Route’ of Predatory Lending
He is not alone. A few months ago, 28-year-old Rajkumar living in Hyderabad also ended his life after facing exactly the same humiliation, which is the modus operandi of Chinese loan apps. There is no compiled data of the number of suicides that have taken place in the country because of these apps, but as per different reports, the number is not less than two dozen. The loan amount in most of the cases remains Rs 2,000-15,000.
“Rajkumar had taken loans from various apps and also repaid 25-30% of them within a few days. But, these apps started sending messages, claiming that he had done fraud and needed money. They also sent objectionable messages to his contacts regarding the women in his family. Finally, he took his own life. We were not even aware that he had taken a loan,” Rajkumar’s brother told News18. He said that even after his death, his friends constantly got calls from these apps.
PART 2 | Illegal Lending Apps Rely on Tangle of Shell Companies, Cryptocurrency to Lie Low
The national capital has also seen suicides due to these apps. Harish, a Dwarka resident, took the extreme step as he was unable to repay a loan of Rs 2,500. Harish had borrowed money from these Chinese apps and they, like in other cases, were threatening him. For just Rs 2,500, the representatives harassed Harish so much, that he found ending his life the better option, said his family members.
“He used to get calls and messages. We got to know about the loan when all his contacts got messages that were very vulgar about me and other women. They used to threaten that they would call everyone in his contact list if he didn’t pay the loan,” Roma, Harish’s sister, told News18.
PART 4 | Pay Workers in Cash, Crypto Route, Foreign Servers: Sly Ways of Lending App Kingpins
There are hundreds of victims who are facing such threatening calls and messages every day, even when they have paid the loans. These apps after downloading ask for access to the phone contacts and photo gallery, which they later misuse rampantly without any fear. The police say they have their own limitations as they get calls on WhatsApp. When cops try to trace the numbers, they lead back to fake ids. In Delhi alone, close to 200 people have been arrested by the police in such cases.
There have been cases where these apps have demanded an annual interest of 30,000% and double the loan amount within 2-3 days. They claim the increase as penalty and fee. Their representatives spare no one and, interestingly, women are also involved in the business of humiliation and extortion, officials say.
PART 5 | Govt Begins Crackdown on Chinese Loan App Companies in Bengaluru, Gurugram, Hyderabad
Even if one has repaid the amount, the cycle of extortion never stops. In many cases, these loan apps deduct 70-80% of the actual amount of loan as processing fees and disbursal charges.
Tejal Panchal, who works in Mumbai, downloaded such an app mostly out of curiosity. As she was in dire need of money, she took a loan of Rs 9,000. Within just three days, she started getting calls for repayment. “They asked me to pay more than 16,000 rupees. They got more abusive day by day and within six days they started sending my cropped vulgar photos to my contacts. They steal contacts from the moment you download the app and give them access permission. Immediately, I paid Rs 16,270 with a few days of loan disbursal. I paid my full month’s salary to them,” Tejal told News18.
PART 6 | Bengaluru Address, Delhi Facilitator: Common Links in Multiple Investigations Into Predatory Loan Apps
Simran’s family was looking for a bridegroom for her and had finalised one. But a Chinese loan app ruined her marriage. “My sister took a small loan of Rs 9,000, thinking that she would repay the amount within a month. But after taking the money from the app Fly Loan, she started getting calls and messages, abusing her badly. This loan app also sent messages to all her contacts, writing vulgar things about her and our family. We paid the whole amount with interest but calls and messages didn’t stop. They sent messages and made calls to the groom’s family, which became a major embarrassment for us,” her brother told News18.
Imran, a resident of Telangana, lost his job due to the Covid pandemic. “For a few days, I was in dire need of money…just 2,000 rupees. I didn’t want to share my condition with anyone, so I downloaded one of these apps. They asked for a little access, which I allowed. After getting ads from various apps, I got a call from an app Go Cash, claiming that I had taken a loan of Rs 5,000. When I denied this, their female representative threatened to send messages to all my contacts. It was just the start… I got at least 200 calls in the next 3-4 days. When I asked them to show the transfer details, the representatives sent messages to all my contacts, claiming that I was a fraud and involved in a sex racket. I had to change my mobile number and requested all my contacts not to talk to these people,” he said.
PART 7 | ‘We Are Victims Too’: Bengaluru’s Co-working Space Provider Under Scanner Over Chinese Loan App Scam
People on social media sites like Twitter too have written about the harassment and humiliation they have had to face because of such apps. They give no time to repay the amount and demand double or triple the original sum within minutes. These app representatives pose as lawyers, police personnel, and government officials to threaten the borrower in vulgar language. They fabricate documents and even use India’s national emblem to appear “official” while extorting money.
The victims are helpless as the police of various states are unable to handle the flood of complaints.
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