Cyber crime police raid four micro loan app firms for harassing customers

Bengaluru: Central Crime Branch (CCB) has registered three cases against online loan app organisers for trapping customers with quick loan offers at usurious interest rates and later using threat/force/intimidation for recovery.

On December 21, a complainant reported to the CCB that she was being harassed by agents from a micro loan mobile app. She stated that since she was in need of a small amount of money, she came to know of a microfinance mobile application catering to her type of needs. She installed the app called "Paisa Loan" from the Google Play Store. She availed herself of a loan from the app and then repaid it in time. Later she took loans from several other apps.

"But from November '2020, even though she repaid the loan the agents of the apps started harassing her to pay extra interest amount, abusing her and her family members in filthy and obscene language, hacked her mobile data, created WhatsApp group of the her contact list and started circulating defaming contents along with her photographs, and also inducing her to avail loans from other apps and to repay the amount etc," the cyber crime division, CID, stated.

A similar complaint was received from another victim on December 22.

Based on the complaints, raid was conducted by Cyber Crime Division, CID on four companies in the city led by Deputy SP, Kasim, Deputy SPs Geetha Kulkarni and Nagaraj and staff, on Mad Elephant Technologies Pvt. Ltd., Borayanxy Technologies Pvt. Ltd., Profitise Technologies Pvt. Ltd., and Wizppro Solution Pvt. Ltd.

Laptops, mobile handsets and documents were seized and as of now CFO and HR manager of a company have been arrested.

During the investigation, it came to light that each company possessed several microloan apps of their own. On installation of such apps, users are prompted with some basic questions including PAN number, Aadhaar number, bank account number, two individual reference mobile numbers etc. Once this information is fed into the application, the app was installed into her phone. During the installation of the application, all kinds of permissions (contacts, SMSs, call logs, camera, storage etc.,) is sought from the customer.

Out of the loan approved by the app (generally between Rs.3,000/- to Rs. 9,000), approximately 60-65 percent of the loan amount is disbursed to the customer's account, after deducting interest, processing fee, tax etc. For example, if a loan of Rs 3,000 is approved, the user may get around Rs.1800 in his account, after deducting all the charges. A customer is charged an interest rate of 36% per annum on the loan amount. The loan repayment period is generally 7 days to 15 days and within the given period, the customer has to repay complete approved loan amount.

The customer receives an alert message through SMS or call from a recovery team of the app, a day or two prior to the due date of the payment. If the customer fails to repay the loan within the specified date and time, the recovery team calls the customer and enquires about repayment. Depending on the reply of the customer, the deadline is issued to the customer pressurising to repay the entire loan amount.

Next course of action is to harass the customer by sending abusive and threatening SMS and in the meantime to call the reference mobile numbers (which were collected during activation of the application), even threaten and abuse them.

Next step is to hack the customer's mobile phone data (within a day or two after the deadline), especially contacts and pictures of the customer. Using these data, a WhatsApp group consisting the contacts of customer is created and messages against the customer is circulated in the group with the photograph of the customer, with all kinds of abuse, sexual overtones, using customer's photographs in the app with a tag of "CHOR", "FRAUD", "420", "DEFAULTER".

"There are instances (in our own case) where a voice message is sent threatening physical and sexual assault on the female victims by the company recovery agents. This harassment will continue till the loan is repaid.

The second part of the problem is that the customer is induced by these recovery agents to repay the loan by taking others loan through a different mobile application, which she has to install in her mobile phone. As such the complainant is caught up in the loop of taking and repaying the loans," the cyber crime division said.

On preliminary investigation the crime division has found that the owners of these apps are some front-end companies, for citizens of neighbouring countries are the

investors/directors and CEOs for every such company.

On identifying the agreements delivered to the complainant, it is observed that some NBFCs (Non Banking Financial Companies) have agreement with these companies for disbursing loans.

Further investigation and raids on these companies has revealed that, every company has at least 10 to 15 such

applications developed and monitored, by them. These applications are directly installed, accessed, used and monitored from cloud systems based in neighbouring countries.