Lending app racket: Mumbai police arrest 14 people, seize 211 SIM cards and 39 phones


Mumbai police busted a lending app racket in which the cybercrime branch arrested 14 defendants across India on Friday. The accused was arrested in connection with more than 200 fraudulent online instant loan applications. However, the police did not mention the name of these applications. In a Mumbai police statement, they froze 360 ​​bank accounts with 14 crores and $2.17 lakh in over 50 crypto wallets. Separately, police also confiscated 211 SIM cards, 39 cellphones and 19 laptops on Friday.

The fraud and harassment came to light when a complaint was filed in May this year and following an investigation the arrests have been made over the past two weeks, the co-commissioner (crime) says Suhas Warke.

When applying for instant loans on mobile phone apps, all of the applicants’ personal data would go to the defendants’ company, which they then used to harass people who failed to repay the loans, he said.

The accused allegedly processed obscene images of the victims who failed to repay the loans or failed to pay the interest and disseminated them to their friends and family members, the official said. The defendants were arrested in Bengaluru (Karnataka), Andhra Pradesh, Gurgaon, Mumbai and Uttarakhand, he said, adding that a new investigation is ongoing.

Despite the Reserve Bank of India (RBI) crackdown on “illegal” digital loan apps, instant loan apps are still popular among Indian users. According to a latest report by community-based social media platform Local Circles, 14% of 27,500 respondents have used instant loan apps in the past two years. These apps continue to charge customers interest rates of up to 500% and use extortion methods to collect money from borrowers or defaulters.

Earlier in 2022, an RBI digital lending task force found that more than half of the roughly 1,100 digital lending providers operated illegally and were available in app stores. The main factor that attracts people to these applications is the easy processing of loans without any collateral. Details like copies of Aadhaar card, voter ID card and Pan card submitted while processing the loan can be misused. More importantly, the contacts and photos stored in the victims’ cell phones were misused, according to various reports.

Last week, a similar incident occurred in Delhi. City police have arrested four men for allegedly extorting money from people through short-term loan applications in association with Chinese companies.

Delhi Police say the defendants lured their victims through social media advertisements falsely promising hassle-free loans from 50,000 on the “on stream” loan application.

One of these victims contacted the police. In his complaint, he said that when he downloaded the app, it sought to access his contacts and the phone’s gallery.

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

The victim paid them a lakh but continued to receive derogatory messages with demands for more, police said.

During the investigation, the accused were found near Dwarka. A raid has been carried out on a call center operating from three floors of a building in Sector 7 in Dwarka over the past two years, Police Deputy Commissioner (Outer North) Brijendra Kumar Yadav said.

He said it was discovered that the union employed 134 women, 15 men and three team leaders for the operation.

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

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

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