Home / News / India /  Loan app racket: Mumbai police nab 14 persons, seize 211 SIM cards, 39 phones

Mumbai Police on Friday busted a loan app racket in which the Cyber crime branch arrested 14 accused across India. The accused has been arrested in connection with 200+ fraud online instant loan apps. However, the police did not mention the name of those apps. In a statement by the Mumbai police, they have frozen 360 bank accounts with 14 crore and $2.17 lakh in more than 50 crypto wallets. Besides, the police also confiscated 211 SIM cards, 39 mobile phones, and 19 laptops on Friday.

The fraud and harassment came to light when a complaint was lodged in May this year and following a probe, the arrests were made in the last couple of weeks, Joint Commissioner (crime) Suhas Warke said.

While applying for instant loans on mobile phone applications, all the personal data of the applicants would go to the company of the accused persons, which they then used for harassing people who failed to repay loans, he said.

The accused allegedly morphed obscene images of the victims who failed to repay loans or defaulted on the payment of interest and circulated the same to their friends and family members, the official said. The accused were nabbed from Bengaluru (Karnataka), Andhra Pradesh, Gurgaon, Mumbai, and Uttarakhand, he said, adding that a further probe is underway.

Despite the Reserve Bank of India (RBI)’s crackdown on ‘Illegal’ digital loan apps, instant lending apps are still popular among Indian users. According to a latest report published by community driven social media platform Local Circles, found that 14% of the 27,500 respondents have used instant loan apps in the last two years. Such apps keep charging customers as much as 500% interest rates and use extortion methods to collect money from borrowers or loan defaulters.

Earlier in 2022, an RBI Working Group on digital lending found that more than half of about 1,100 digital loan providers were operating illegally and were available in app stores. The main factor that lures people into these apps is easy processing of loans without any surety. Details such as copies of Aadhaar card, voters ID and Pan Card submitted while loan processing can be misused. Most importantly, contacts and photos stored in victims’ mobile phones were found misused, as per various reports.

Last week, a similar incident happened in Delhi. The city police arrested four men for allegedly extorting money from people through short-term loan applications in association with Chinese firms.

The Delhi police said the accused lured their victims through advertisements on social media falsely promising hassle-free loans of 50,000 on the loan app "on stream".

One such victim approached the police. In his complaint, he said when he downloaded the app, it sought access to his contacts and the phone's gallery.

When he granted the permission, the app gave him a loan of 6,870 and started harassing him using information from his contact list and photographs, a senior officer said.

The victim paid them one lakh but kept receiving derogatory messages with demands for more, the police said.

During the investigation, the accused were traced near Dwarka. A raid was conducted on a call centre operating from three floors of a building in Dwarka Sector-7 over the last two years, Deputy Commissioner of Police (outer north) Brijendra Kumar Yadav said.

He said it was found that the syndicate had employed 134 women, 15 men, and three team leaders for the operation.

The accused were extorting money from people in association with Chinese loan application firms. They have already siphoned off 10 crore to two Chinese nationals Albert and Trey, and have received around three crore as commission since March last year.

The accused used to communicate using the multilingual Ding Talk app.

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