How Fraud Loan Apps Trap Borrowers - And What You Need To Do

The proliferation of illegal loan apps in recent years has raised significant concerns, despite the government”s efforts to combat them. These apps pose a serious threat to the society and economy due to their unscrupulous practices, which include threats and harassment. Tragically, there have been instances where individuals who defaulted on these loans resorted to suicide out of fear of public humiliation and relentless harassment by loan recovery agents.

One such heartbreaking incident involves a four-member family in Kerala. Nejo, his wife Shilpa, and their 7 and 5-year-old children, Aibel and Aron, residents of Kadamakkudy, took their own lives, citing financial difficulties as the cause. However, their relatives allege that online lenders” harassment was the root cause of their tragic deaths. Shilpa had defaulted on a loan of 93,000 rupees and was subjected to blackmail with morphed nude photos. Shockingly, some of the family”s relatives also received these photos as WhatsApp messages from anonymous numbers.

An investigation into the matter revealed that Shilpa had borrowed money from an online lending company to cover family expenses and the costs associated with her planned relocation to Italy for work. “While it”s important to note that we are still in the process of verifying the lending firm”s details, we have confirmed that 9,300 rupees were being debited from her bank account every month as loan repayment. However, Shilpa missed some payments, which led to the distribution of the morphed photos and threatening calls from the lending firm”, according to a police sources.

To trace the lending firm responsible, officers began tracking the WhatsApp number used to send threatening messages to relatives. “Although we have not yet been able to unlock the victim”s phone, we have gained valuable insights indicating that online lending teams had indeed threatened the victim. We anticipate obtaining further information once we successfully unlock the phone,” stated Vivek Kumar, SP Aluva.

It is crucial to note that online app threats have not been confined to Kerala alone. In the 2022-23 period, there were 1,062 such cases reported across the country.

In response to these complaints, Google took action by removing 75 illegal loan apps from its Play Store Apps on Saturday. Just last week, Google had cracked down on 134 “quick loan” apps from its Play Store. Astonishingly, 12 of these predatory apps had been downloaded over one lakh times, and 14 apps had amassed 50,000 downloads.

Despite these efforts, approximately 50 fraudulent apps remain available for download on the Google Play Store, according to a recent report. Earlier, Union Electronics and IT Minister Rajeev Chandrasekhar had issued an advisory to Google and Apple, urging them not to include such unsafe apps in their platforms.

Additionally, the Indian government had previously banned 94 loan apps with links to China. The battle against these illegal loan apps continues as authorities work tirelessly to protect citizens from their harmful effects.

Illegal online lending apps are targeting financially stressed individuals with predatory loans. These apps promise easy access to money with low interest rates and minimal paperwork, but they often charge exorbitant fees and use abusive collection practices.

Here are some points to be noted while dealing with Online lending Apps

Borrowers should be wary of any lending app that:

• Is not listed on an official app store
• Lacks transparency in terms of regulatory approvals and fees
• Requests excessive data permissions or has an unprofessional design
• Uses high-pressure tactics to coerce borrowers into taking out loans or repaying them
• Has negative user reviews or ratings.

To identify legal digital lending apps, borrowers can look for the following key indicators:

• Regulatory approvals and licenses prominently displayed.
• Reasonable interest rates and fees
• Transparent and clear terms and conditions
• Only necessary permissions requested.
• Robust customer support and contact information, including a physical address.
• No upfront payments or processing fees

Borrowers should also consider financial advice before opting for digital loans.

Here are some additional tips to avoid falling victim to illegal online lending apps:

• Never share your personal or financial information with an app that you do not trust.
• Be careful about clicking on links in emails or SMS messages from unknown senders.
• Do your research before downloading any app, read reviews from other users, and check the app”s permissions carefully.
• Be wary of apps that offer loans with very low interest rates or no credit check. These apps are often too good to be true.
• If you are struggling to repay a loan from an illegal lending app, contact the authorities for assistance.

It is important to remember that you are not alone. Many people have fallen victim to illegal online lending apps. If you have been scammed, there are resources available to help you.