Loan app scam: Majority of victims are educated youth and IT professionals

Hyderabad: A majority of the victims in the loan apps scam, it turns out, are well-educated individuals and information technology professionals. Police say they have written to Google, urging it to take out 158 instant loan apps from Google Play Store.

“When downloading an app, regardless of the threat level, one must always check for the permissions it asks and check the reviews as well. The most common target audiences are the educated lot and the small time small-time businessmen hit by the sudden lockdowns and the economic downturn," said the police.

Cyberabad police officials said that, after a customer downloads an app and uploads the documents demanded, the loan amount is credited into the applicant’s bank account. The phone numbers of the customer as well as the numbers of his family members are shared by the app company with others. After a customer avails a loan, tele-callers and agents of about 20-30 similar apps call the customers and lure them into availing more loans. They would say, “You are eligible because your credentials have been verified by the company from which you borrowed the first loan.”

Many customers fell for this trick and ended up borrowing upto Rs the maximum of 50,000. “The interest rate is 35 per cent. After the due date, a flat Rs 3,000 as penalty per day is levied on the customer. Many customers end up borrowing more to repay a previous instant loan, and end up in a deep pit from where escape would be difficult," explained the cops.

Loss of job one reason to lead victims to instant loan app firm

“It was a desperate time. A short-term loan seemed like a huge help,” says a victim of the sensational loan app scam who was harassed and abused by tele-callers, causing extreme tension that pushed him into depression.

“I had suddenly lost my job and needed to meet essential requirements. I had no idea that borrowing a mere Rs 8,000 would mean I would end up repaying Rs 30,000 by way of hefty charges and interest,” he said.

Requesting anonymity, the victim said he had to take care of his children's school fee, car EMI, house EMI, medical needs of the parents, all of which piled up after his company retrenched him. "I ran out of savings in the next few weeks and stumbled upon the money lending apps that give instant loans with a decent time to repay. Assuming I will get another job, I availed the loan and took the money after a 10 per cent deduction of TDS,” he said.

“Though I repaid the loan, a little delayed, the customer care executives called me to say the app charged a 30 per cent interest and that I needed to pay Rs 9,000 more. This is significantly higher than interest charged by any RBI-approved institution," noted the victim.

When questioned, the customer care started abusing him and threatened to call his friends and family as well.

Apart from charging hefty penalties for delay in repayment of the loan, its agents also blackmail and threaten the customers. “On the due date, the penalty customers are called as D-0 buckets. After the due date from day 1 to day 3, it is S1 bucket; from day 4 to 10, it is S2 bucket; and from day 11 to 30, it is S3 bucket,” explained the officials investigating the case.

The customer, or the victim, is treated depending on which bucket the customer is in.

After the due date, the victim will be harassed with dozens of calls. “During the S2 bucket, abusive calls will come to family members. Later, threats and blackmail would start. Finally, they access the contacts of relatives and friends of the customers and send them WhatsApp messages defaming the defaulter," say the officials investigating the cases.

Police alert after loss of three lives

It was after three lives were lost that the cops and the other authorities woke up and started a crackdown on the scammers, said a psychologist who kept track of the scene.

“A person who is harassed and humiliated could easily experience depression, suicidal tendencies, and severe anxiety, specifically when their social circles too are targeted.”

Dr Meena Hariharan, professor in health psychology at University of Hyderabad and president of Association of Health Psychologists of India, noted that the mental health of the people is already weak due to the lockdown and the resultant adjustments in life.

"It becomes a question of an individual's self-esteem and value system. When someone is causing a dent on that, the mental status can get very unstable. When their social life is being targeted, there is no way one can rectify his image with all those people. For any self-respecting person, this will be too much to bear," she said.