Fraudsters on Prowl to Scam Indians Using Fake Apps. Here’s How You Can Protect Yourself.

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Despite hundreds of lending apps being banned or removed of late, fraudulent loan applications targeting the middle class and financial unsavvy Indians are on the rise again. A similar case came to light in February this year when a woman alleged that she was being abused and threatened by some unknown persons who were sending her morphed and vulgar photographs to her family, friends and relatives through social media.  She approached the IFSO unit of the special cell and lodged a complaint. Narrating her ordeal, the complainant said she had taken a loan from a Loan App, Cash Advance, which she repaid the same in time. However, after repaying the loan she started getting threat calls and messages on WhatsApp from Cash Advance employees.

Indians Falling Prey to Cyber Frauds

Of late, gullible Indians are everyday falling prey to the small amount of loans that they get through these Chinese-operated fake loan apps that are available on the Play Store. People are being defrauded to the tune of hundreds of crores of rupees everyday.

where a man alleged that he and his family, friends and relatives are being abused and also threatened by some unknown persons through some international and national WhatsApp mobile numbers, to repay the loan taken by the same “Cash Advance” application.In another case, when the police were investigating a cyber fraud of just Rs 6500, it was shocked to learn that the bank account in which the cheated amount was deposited had a daily transaction of Rs 19.43 crores.

How Does Cyber Fraudsters Work?

Speaking to IANS, a senior Delhi Police official asserted that in the past six months several cases of fraud, ultimately connected to Chinese cyber gangs, have come to light.  These high-tech Chinese cyber criminals have devised a new strategy to dupe people and are these days defrauding Indians via fake loan applications. “These lend money instantly to any person downloading these applications for a period of a few days. At the time of downloading the application, the app asks permission to capture, contact list, photo gallery and other personal data of the phone of the loan seeker,” IANS quoted the police official as saying.

  • After taking a loan, some of the total amount is deducted as processing fees
  • If the remaining amount is not paid within the stipulated time the interest and penalties together take the repayment to 200 percent of the loan amount.
  • If the money is not paid, the call centres operating out of neighbouring countries like Nepal, threaten the victims to leak their personal data and make abusive comments to their contacts as while downloading the application it accesses all the contacts, photos and other data in the mobile phone of the victim.
  • Since the money cannot be directly transferred to international or Chinese bank accounts, the fraudsters need Indian bank accounts to take payments.
  • This is where the Chinese scamsters are finding vulnerable, poor and greedy people of the country to help them in getting the Indian bank accounts.

Unregistered digital lending apps vs Registered Lending Apps

Earlier last month, Reserve Bank Governor Shaktikanta Das had said that customers borrowing from unregistered digital lending apps should approach the local police in case of any issue, making it clear that the central bank will only act against entities registered with it. Das said most of the digital lending apps are not registered with the central bank and operate by themselves.

The RBI website has a list of apps that are registered with it on the website, the governor said, adding that the police in many states have acted against the wrongdoers as per the provisions of the law.

Modus Operandi
People are lured by promising a higher loan amount without paperwork. Customers will get the money instantly but less than the promised sum. As the customer installs the app, it will have access fo sensitive information of the customer.

It will gain access to phone contacts, gallery and other information. Using this information, the company will adopt harsh recovery tactics. The loan agents will abuse and harass the customers and will go up to the extent of calling the friends and relatives of the customers from their contact list.

In some cases, customers died by suicide after cyber fraudsters allegedly circulated morphed photos for failing to repay loans taken through an instant loan mobile app.

Important Points to Consider Before Taking Loans from Online Apps

Is the Lender Approved by RBI?
The first and foremost thing that a customer should do before applying loans on apps is whether or not the company is approved by the Reserve Bank of India. It ensures that you do not land in problems pertaining to repayment as the companies which do not follow the RBI guidelines are expected to harass the customers once taking loans.

Does the Lender Have a Website and Physical Office?
See whether the lender has a proper website and whether it has mentioned all the details about the company. More importantly, see whether the lender has a physical office. Most scammers do not have websites or physical office.

Check Reviews
Also, check reviews by customers which give you a fair idea about the lender. And avoid taking loans from apps without verify badge. Find out whether the app is associated with a bank or non-banking financial company (NBFC) and vice versa.

Terms and Conditions
Many of us tend to ignore the section ‘Terms and Condition’. Studies have shown that most people pay attention to ‘terms and conditions’ without realising that it is an agreement which acts as a legally binding contract between you and the company. So, always read ‘terms and conditions’ especially when you are doing financial transactions online.

Look Beyond Interest Rates
There have been reports about individuals/small businesses falling prey to growing number of unauthorised digital lending platforms/Mobile Apps on promises of getting loans in quick and hassle-free manner. These reports also refer to excessive rates of interest and additional hidden charges being demanded from borrowers; adoption of unacceptable and high-handed recovery methods; and misuse of agreements to access data on the mobile phones of the borrowers. Hence, find out all the charges charged by the app like pre-payment, processing fees, etc.

Don’t Get Loans Without Credit History
People should not take loans from apps that are ready to give loans without taking your credit history into consideration and are willing to sanction immediately. Never pay money to get loans sanctioned. “The processing fee is usually billed to you as part of your loan or to be paid directly to the bank on NBFC offering you the loan. If you are being asked to pay a part of the loan upfront for processing or required to pay cash or transfer money to any personal account, it is a red flag.

About Post Author

Rivet

1. Certified Penetration Tester 2. Consultant Cyber Law & Crime. 3. Traveller
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