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App loan fraud: Check Details And Save Yourself

App loan fraud:

There are certain dos and don’ts which everyone needs to follow to steer clear of the traps of mobile loan frauds

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To put things into perspective, here is the real story of Karan (name changed), a salon worker, who lives with his wife and an eight-year-old daughter. He earns a decent monthly salary that suffices his day-to-day expenses. About a month ago, he decided to buy a smart TV and a refrigerator. Though this expenditure was beyond his budget, he anyways went ahead with the purchases.

Unknowingly, he put himself in a financially restrained situation and the monthly deficit put him in a tough spot to manage his daily expenses. So, Karan started exploring the online money lending applications on his phone to relieve himself from the financial stress.

Scrolling through hundreds of options, he came across a mobile application (App), which offered him some lucrative money-lending options. Unfortunately, it was a fraudulent mobile loan application, which asked Karan to enter his mobile number, bank account number, PAN and Aadhar details to get approval for a Rs 9,000 instant loan.

To his surprise, the amount was immediately credited to his bank account. Karan was confused at the superfast transaction from the money lending application, which alerted him to read the minute details and terms and conditions of the loan. Upon closely checking the repayment details, he was shocked that his loan amount, which had an interest component of a staggering 80 per cent, was due for repayment within the next 10 days.

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And then his worst nightmare started. He started getting calls from various numbers, saying that if he refuses to pay back the money, he will get into various troubles, his bank account would be hacked. The scammers got access to his email contacts and phone numbers, his photos and videos, who then threatened to expose his personal details. Karan’s fake social media account was created where the scammers started demanding money from his contacts. Even his wife started getting threatening calls.

Fearing worse, Karan approached the cyber cell of police. But police refused to file any case, saying that since he was getting calls from various numbers it was difficult to file the case. He was asked to shut his bank account, change his mobile number and alert his close contacts not to respond to any “emergency situation” related to him. Though Karan did manage to come out to salvage the situation, his entire social, personal and financial life were messed up.

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Today thousands of individuals like Karan get scammed from online money lending applications and fake calls. Though the government has no data so far on this mobile application financial fraud, the situation is alarming. Recently a Chinese loan app fraud, which resulted in extortion and harassment of many across India had created stir. From Mumbai to Delhi, Bangalore, Lucknow and Hyderabad, daily news reports related to mobile app loan frauds have become the order of the day.

While the Government and the Reserve Bank of India is still struggling to deal with online frauds, this new challenge of mobile app loan fraud has forced the government to set up a team of IT, financial, legal and security experts to find a solution to find a way out of this complex situation.

According to the latest government data, cases related to online frauds have come down by about 17.5 per cent in 2021-22 to ?128 crores as against ?160 crores recorded in the previous fiscal. Interestingly, the amount of fraud decreased but the number of cases increased. In the 2021-22, the Reserve Bank of India (RBI) reported around 9,103 bank fraud cases across India.

Recently, many online scammers have started using newer ways to target innocent people by morphing their photos with vulgar images on video calls and blackmailing them into paying money. Dating apps and WhatsApp messenger have become common ground where unknown people send video call requests and record the screen with your live photo/ video, and later use it to blackmail individuals to extort money.

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There are certain dos and don’ts which everyone needs to follow to steer clear of the traps of mobile loan frauds. Do not download untrusted mobile applications, doing so could lead your devices prone to malware, virus, and spyware attacks and compromise the safety of the digital device. Do not upload sensitive information such as your bank account details, Aadhar, or PAN information on a non-trusted mobile application. Always use stronger passwords to protect your digital accounts such as email accounts and social media accounts from getting hacked.

And the most important lesson is that instead of falling prey to unknown financial sources, always seek financial support from a known bank or non-banking financial company or NBFC. As they say, it is always better to be safe than sorry.

(Sandeep Joshi is a freelance journalist; Appurva Bhandari is a digital safety activist)

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