Do Not Fall Victim to Instant Loan App Scam

Written by – Gurjot Singh Kaler 

One of the latest scams doing the rounds is instant loan app scam. These loan apps are nothing but well-oiled and organized extortion  rackets being operated from outside India. The Telangana Police in its  massive crackdown against such fake loan apps in December 2020  indicated transactions of more than 21,000 crores. Similarly, in 2021,  the Enforcement Directorate filed a complaint with the Hyderabad  Central Crime Station (CCS) about a 1400 crore transaction related to  these fake loan apps whereby money through Hawala route was  siphoned off to offshore destinations like Hong Kong, Malaysia, etc. In  July 2023 also, the Intelligence Fusion and Strategic Operations (IFSO)  Unit of Delhi Police’s Special Cell has busted various modules of  instant loan applications having Chinese connection whereby more  than 500 crores have been sent to China through Hawala route or  cryptocurrency. Many poor and gullible people have fallen victim to it  and suffered irreversible consequences. The victims have not only  lost money but also faced social, mental and psychological trauma  due to these fake loan apps. These loan apps are mostly Chinese apps  and can be downloaded from Google Play store and these come with  various names like instant loan, quick loan, AG Loan, “Money Box”,  “Loan Gram”, “My Bank”, “Coco Cash”, “Cashpot”, “Need Rupee” and  “Panda Rupee”, “Cash Advance”, etc. Many of these fake loan apps  have been banned by the Indian government but still, these keep on  operating with impunity. Even though Google keeps on deleting and  banning these fake apps, yet, they keep on appearing with some  other names. These fake loan apps have a sinister plot and in some  parts of India, the victims have even committed suicide due to the  unbearable mental pressure put by the recovery agents/goons. The  loan app scams operated at their peak during the covid phase 

lockdown when most of the people lost jobs and were in dire need of  money. 

Once the victims download these free and easily available Chinese  loan apps from the Google Play Store, these loan apps ask the users  to give them the access to their contact lists and pictures and videos  stored in the gallery of the phones. Then, the victim is asked to  upload their bank account details as well as Aadhar Cards and PAN  cards on these loan apps. Once the victim clicks and accepts the  terms and conditions of these loan apps, a certain amount of money  as a loan amount is actually transferred to the victims’ bank  accounts. After taking a loan, some of the total amount is deducted  as processing fees. If the remaining amount is not paid within the  stipulated time the interest and penalties together take the  repayment to 200 percent of the loan amount. 

Everything looks hunky-dory till now except the fact that once few  days have passed off, the victims start getting calls and messages on  their Whatsapp and phone to repay the loan amount. The tricky  catch here is that the amount of money being demanded from the  victims is much higher. For instance, if the victim had been given a  loan of Rs. 4000/-, the scamsters usually demand Rs. 8,000/- in  return. If the victims start questioning or arguing, the scammers  threaten the victims to morph their personal photos in an obscene  manner and make them go viral my sending them to their contacts in  the phone or even threaten to upload their vulgar photos and videos  on social media platforms in order to mentally pressurize them. The  victims are also threatened with sexual assaults and intimidated that  their nude morphed pics would be uploaded on adult websites for 

the pornographic customers to call them and harass them. Since  these loan app scams had already got the access to the users’ media  gallery and contacts earlier, it becomes very easy for them to  manipulate those resources now. As a result, many victims get fearful  of a loss of their social reputation and thus, end up meekly complying  with the illegal demands of the fake loan scammers. Some of the  users get mentally perturbed due to the social stigma and fall into  the vicious debt trap of these scammers. If the victims fail to pay the  money, these scammers also start calling the family, friends and  acquaintances of the victims and use utterly foul and filthy language  to add salt to their wounds. The recovery agents also threaten the  victims of lowering their credit ratings and lodging police complaints  against them. If you are a guy, these conmen photoshop you in a  news report of a rape case and forward that message to all his  contacts. If the borrower is a girl, her photo is morphed into  pornographic images and shared with her entire contact list.  Moreover, these culprits start circulating the victim’s phone number  as an escort. Their ultimate aim is to instil deep fear and anxiety in  the minds of the victims so that they are able to surrender  themselves and end up paying the extortion amounts to these  agents. The accused running Chinese apps make a WhatsApp group  of the contact details of the victim. The women contacts are sent  objectionable messages. All the contacts of the victim are called by  their agents who falsely inform them that the loan-taker had made  them guarantors. This is the prime modus-operandi opted by Chinese  nationals to extort money from Indians through these loan apps. Due  to fear and stigma, many victims end up paying money to scammers  in different bank accounts opened against fake IDs. The ill-gotten  money which is collected gets diverted to specific bank accounts and  then, ultimately sent to China through Hawala route or after  purchasing cryptocurrencies. Poor and needy people who had taken  small, paltry amount of loan such as Rs. 5000 or Rs. 10,000 are forced  to repay in lakhs. Since the Indian police has launched massive 

crackdown against the handlers of these fake loan apps and horde of  scammers are being arrested on a daily basis, these clever scammers  are now shifting their recovery call centres to Nepal, Bangladesh and  Pakistan. The recent police raids and Enforcement Directorate  

operations against these fake loan apps has shown that the owners  of these fake loan apps were some front-end Indian entities, for  which instructions came from Chinese citizens. They entered into  agreements with non-bank financial companies (NBFC) for giving out  loans. Each entity had floated several apps that were installed,  accessed, used and monitored from cloud-based servers in China like  Mad Elephant, Baryonyx Technology and Cloud Atlas Future  Technology. The Chinese scammers used forged documents of  Indians and made them dummy directors of those entities while  generating proceeds of crime. 

It is imperative to spread awareness about these fake instant loan  apps amongst the masses so that people do not get easily fooled into  their tricks.  

Here are some precautionary tips to remember to distinguish  between fake and original loan apps - 

• Remember that the real and original loan app companies would  always be registered with the Reserve Bank of India (RBI).  Before downloading them from the Google Play Store, ensure  to check the registration number of these loan companies from  the RBI’s website. All legal lending companies are required to  clearly show the same along with their Company Identification  Number (CIN) and details of the Certificate of Registration  (CoR) with RBI.

• Always read the reviews of these loan apps before downloading  them. Most of these loan apps have a very less rating and if you  carefully scrutinize the comments on the user reviews, you  might come across people who have already been a victim of  them. Reading the reviews carefully can help you in preventing  yourself become a victim of these fraud loan apps. However, it  needs to be noted that in order to target the unsuspecting  people in need of quick cash, these shady companies make  effective use of digital marketing. If you search for words such  as “loan” or “quick cash” in Google Play Store, you are most  likely to end up with these apps. Based on your search history,  you may even see their ads on Google’s ad network including  on YouTube. Surprisingly, most of these apps maintain positive  reviews on Google’s repository. These fraudsters use content  farms to dump thousands of fake reviews every week to bury  the genuine feedback. Therefore, it is important to exercise due  caution and apply one’s mind in a careful manner before  downloading the apps. 

• If a loan app appears to be too good to true, it is surely a scam.  For instance, if a loan app does not check a user’s credit history  before sanctioning a loan amount, it is a definitive red flag.  Similarly, if the loan app does not ask the users for any  paperwork t be completed, it is also a sign of luring the  potential victims and scamming them. Always get the loan from  RBI authenticated and verified lenders. 

• If a loan app is asking for unwarranted permissions from the  user to access their contact lists and media gallery including 

photographs and videos from the phone, it is a sure-shot sign of  a scam app. 

• Most of the illegal Chinese lending apps do not have any  authentic physical address of their company and do not even  list their website. If a company doesn’t have a physical address  or website, do not download the app. It’s a scam. 

Ways to protect yourself if you have fallen victim to these loan apps scam- 

• Immediately report the matter to the police or lodge a  complaint with cyber police. You can also submit a written  complaint online at www.cybercrime.gov.in 

• If you get threatening calls and messages from the scammers to  repay an unjustified amount of money, simply block them and  uninstall the loan app from your phone. Also, revert to factory  settings on your phone so that the scammers do not have any  access to your phones. 

• Tell your contacts that you have been a victim of these fake loan  apps and politely request them to ignore the calls and messages  of these scammers.  

• Be mentally strong and do not let yourself go into depression by  getting secluded. Just talk to the people around and share your  problems.  

• Report the matter to the RBI and also report these fake loan  apps to the Google Play Store to be removed. Be a responsible  citizen and an aware consumer to educate the people.

Always remember that prevention is better than cure. Beware  of such fake loan app scams and protect your hard-earned  money.