New Delhi: The Union Home Ministry has demanded immediate strict action by law enforcement agencies against loan apps to robbers as there have been several incidents of suicides due to harassment, blackmail and harsh recovery practices by such Chinese-controlled entities. In a letter sent to all states and union territories, the Home Ministry said that the issue has seriously affected national security, economy and civil defence.
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It said that a large number of complaints have been received across India related to illegal digital lending apps, which offer short-term loans or micro-loans at exorbitant interest rates with hidden charges for processing or hidden charges, especially for vulnerable and low-income groups. – Provide credit. Lenders use confidential personal data such as contacts, locations, photos and videos of borrowers for blackmail and harassment.
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The harsh recovery practices adopted by these illegal lending apps have taken many lives across India. “The issue has serious implications for national security, the economy and civil defence, the communication said.
The home ministry said that these illegal lending apps which may not be a Reserve Bank of India regulated entity (RE) are largely using bulk SMS, digital advertisements, chat messengers and mobile app stores. The borrower will have to provide mandatory access to contacts, location and phone storage to avail the loan. The States and Union Territories were told that the recovery agents located in India as well as abroad are using morphed images and other abusive practices to harass and blackmail citizens in violation of RBI’s Fair Practice Code. Data is misused.
The Home Ministry said that after investigation, it has been found that it is an organized cyber crime that can be attributed to disposable emails, virtual numbers, mule accounts, shell companies, payment aggregators, API services (account verification, document verification), cloud hosting, cryptocurrencies etc. is carried out using . Therefore, it is advisable to involve domain experts during the investigation.
The Ministry of Home Affairs said that law enforcement agencies will utilize the services of National Cyber Crime Forensic Laboratory (NCFL), one of the mandates of the Indian Cyber Crime Coordination Center (14C), CIS Division, for technical assistance on loan app analysis, malware analysis and can take advantage. Crypto transaction tracing. All the states and union territories are requested to take strict legal action in this regard. Apart from this, all the states and union territories are also requested to spread public awareness against the risks of using such apps in all the districts. Said it.
A large number of Chinese-controlled loan apps have been found to indulge in predatory lending in recent times. Apart from indulging in unethical practices, these apps use loopholes in the rules and often operate in violation of the existing rules and regulations.
Such apps came to the fore during the COVID-19 pandemic as many people across India faced financial hardship and needed money and these apps lent money for a period ranging from a week to 30 days. These lending apps will charge high-interest rates and processing fees. Moreover, these apps are often found harassing users about paying their dues, leading to dozens of suicides.
The Enforcement Directorate recently frozen Rs 9.82 crore of Chinese-controlled loan apps parked in merchant IDs with payment gateway companies. The lending apps are part of an ongoing money laundering investigation against a “Chinese-controlled” investment token app, officials said.