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Telangana cops bust mobile loan racket after 3 deaths ‘due to harassment’

Police have identified 18 bank accounts linked to the firms and froze them, and have also issued notice to Google regarding the apps.

Written by Sreenivas Janyala | Hyderabad |
December 29, 2020 3:53:13 am
Officials said that if a person borrowed Rs 30,000 for seven days, the company charged Rs 24,000 as interest.

Following three deaths by suicide linked to harassment for loan repayment in Telangana, the Cyberabad Police have busted a racket of app-based unauthorised lenders who offered instant personal loans at exorbitant rates through several mobile applications available on the Google Play Store. Unsuspecting customers were coerced into parting with double the amount borrowed.

Officials said that if a person borrowed Rs 30,000 for seven days, the company charged Rs 24,000 as interest.

“If the customer could not pay the entire amount back, agents from call centres start harassing. Through the app they collect phone numbers of the family members and friends and call them and send abusive messages too,” Cyberabad Police Commissioner V C Sajjanar said.

The agents also sent fake FIRs and court summons to intimidate the customers.

Following a complaint, several places linked to the lenders were raided on Tuesday and six people were arrested, including the chief executive officer of Onion Credit Pvt Ltd and Director of CredFox Technologies Pvt Ltd — two firms that had designed seven apps for the purpose and were running three of them after selling four to other firms Asia Inno Networks Pvt Ltd and Blue shield Fintech Pvt Ltd.

The two firms have 1.5 lakh customers of which nearly 70,000 are currently active.

On December 17, K Mounika, an Agriculture Extension Officer in Siddipet town, died by suicide after an app-based lending firm put out her photo, phone number and details of her family on social media and branded her a defaulter using abusive language. Unable to bear the humiliation, Mounika hanged herself.

Last Friday, P Sunil, a techie who lost his job during the lockdown, died by suicide at his home in Rajendranagar.

When he was unable to repay the amount, recovery agents threatened to call up his father and friends and reveal his personal details on social media.

In another instance, the app company sent a message to a customer’s father saying “chor ka baap. Badnaam karoon kya?’’

Loans were usually given for a period of 7 days at an interest rate of 35 per cent. After the due date, a flat interest of Rs 3,000 per day is levied, trapping customers in a cycle of debt.

Police have identified 18 bank accounts linked to the firms and froze them, and have also issued notice to Google regarding the apps.

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