Multi-city Crackdown on Illegal Instant Loan Apps, 17 Arrested

Police raided 2 locations in Gurugram and 3 locations in Hyderabad which were running organised tele caller centres.

Data leaks of personal information increase the threat from phishing.

(Photo: The Quint)

In a multi-city crackdown on illegal instant personal loan apps, 17 people were arrested after the police conducted raids in Hyderabad and Gurugram.

This comes after three people died by suicide due to harassment by employees of online loan apps last week. A techie and a woman government employee were among those who ended their lives.

The Hyderabad Police has frozen 75 bank accounts that hold Rs 423 crore in connection with a multi-crore money lending scam, reported NDTV. These money lenders reportedly charged victims up to 35 percent interest.

At least 60 such loan apps available on Google Play Store were not registered or recognised by the Reserve Bank of India as an NBFC, this makes their operation illegal, Telangana DGP’s office told The Indian Express.

Police reportedly raided two locations in Gurugram and three locations in Hyderabad, which were running organised tele caller centres. These call centres were being used to persuade, harass and intimidate the loan defaulters. 

Police seized nearly 700 laptops, servers, computer systems, among other gadgets. Further investigation to find out the trail of financial transactions, funding, technology base is underway, reported IANS.

“These callers took instructions from their heads in Indonesia. The entire operation of these loan apps appears to be run with Chinese nationals at the helm. This was also indicated during investigation into the multi-crore colour prediction gaming app scam where crores of rupees were transferred to shell companies which were registered as NBFCs.”

Hyderabad Police Commissioner Anjani Kumar told IANS     

Meanwhile, the Cyberabad police are carrying out independent investigations and have arrested seven, including a 32-year-old engineer named Sarath Chandra, with a degree from the United States, reported NDTV. Chandra reportedly carried out money lending operations through two companies- Onion Credit Pvt Ltd and Cred Fox Technologies, which were started in 2018-19.

The two companies had two offices with 110 employees, and they had entered into agreements with nine NBFCs. Both the companies reportedly have 1.5 lakh customers, of which about 70,000 are active.

RBI on Wednesday, 23 December, issued a statement cautioning individuals and small businesses against falling prey to growing number of unauthorised digital lending platforms/Mobile Apps.