Instant Mobile Loan App: Complaints up 376%, Pune Cyber ​​Police Say

Debt, threats from loan sharks and desperation prompted a 24-year-old woman to murder her own grandmother and steal her gold jewelry on Tuesday morning, which has gained momentum since the Covid-19 pandemic.

According to the Pune Cyber ​​Cell, complaints of harassment from instant loan apps have increased by 376% in the wake of the Covid-19 pandemic. In 2019, the cyber cell received 322 mobile instant loan complaints, rising to 837 in 2020; 928 in 2021; and finally 3151 in 2022.

Kumar Ghadge, Police Inspector, Pune Cyber ​​Cell, said these mobile apps pay out even small amounts at much higher rates (12 to 15%) than the market. They don’t follow the strict procedures that banks follow before disbursing loans. Customers only need to fill out an online form with details after downloading the app. Importantly, customers must give the loan provider access to their cell phones, contact lists, and cameras, which are later used against them. Some of these apps are even gaining interest on a daily or weekly basis. Loans are disbursed for a period of 15 days or one/two/six months. If someone doesn’t repay the loan on time, compound interest adds to the amount, and then the trouble begins. In such cases, the credit providers abusively call every number on the customer’s contact list, police say. In some cases, they take the customer’s photo/video with their camera and post morphed versions on social media sites to defame him/her. According to the Pune cyber cell, this trend of giving instant loans and extorting money has increased. In Pune alone, more than 3,000 complaints were received in the first eight months of 2022.

Bhagyashree Navtake, Deputy Police Commissioner of the Pune cyber cell, said: “Yes, the complaints are increasing and with the relaxation of various norms and instant money, many people are falling into the trap. However, we appeal to people not to download such apps. You can legally apply for loans instead.” Navtake urged people facing such harassment to contact the nearest police station for help.

Another Pune cyber cell official said that almost all such instant loan apps are illegal and tend to violate lending norms mandated by the Reserve Bank of India (RBI). The central government and RBI should ban all of these apps, the official said. The Pune cyber cell has urged people to first verify the credentials of the instant loan app developer before downloading the app. There are 577 financial institutions listed by the RBI that can lend people money.

case studies

An 18-year-old student from Shivajinagar had applied for a seven-day loan of Rs. 2,000 to meet his personal needs. After seven days he had to repay 5,000 rupees including principal and interest. Somehow, he failed to return the amount on time, and starting at 6 a.m., he began receiving threatening calls from mobile app representatives. One day, the loan provider’s representatives shared his morphed video with him and threatened to make it viral on social media to defame him.

Last year Mahesh Mane from Warje-Malwadi applied for a loan of 10,000 rupees through a Chinese instant loan app. After he was unable to repay the loan amount, first his friends and relatives and later his office mates received abusive phone calls from the lender’s representatives. Mane somehow managed to repay the loan but remembers the experience so far.

In January 2022, a Hadapsar woman, 45, downloaded a similar Chinese instant loan app and applied for a loan of Rs. 25,000. The loan amount was credited to their bank account within a day without any receipts. When she was unable to repay the loan amount, she received abusive phone calls. A week later, a morphed video of her was shared with her relatives by an unknown number.

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