17 arrested in Telangana, Haryana after 3 die by suicide

Hyderabad and Cyberabad police have arrested 17 people in connection with a app-based instant microloan loan scam, The Hindu reported Wednesday. Police arrested 11 people from Delhi and Gurugram, six others from Hyderabad and also registered 23 cases against instant loan companies.

The scam came to light after three people took their own lives in the past few weeks following allegations of harassment by the companies’ debt collectors. Hyderabad Police then carried out raids in Hyderabad and Gurugram and arrested those responsible for Liofang Technologies Private Limited, Hotful Technologies Private Limited, Pinprint Technologies and Nabloom Technologies Private Limited. All these companies are registered in Bengaluru.

Several call centers were set up in Hyderabad and Gurugram, from where callers harassed people who had taken out loans. More than 1,000 people were employed in three of these call centres, police said, adding that they earned between 10,000 and 15,000 rupees a month.

Cyberabad police, meanwhile, had arrested six people, including Sarath Chandra – a US-educated engineer who ran two companies for money-lending operations. Chandra was the CEO of Onion Credit Private Limited and Cred Fox Technologies Private Limited, and have also developed and sold loan applications to businesses in Bengaluru, according to NDTV. Mobile apps included those such as Dhana Dhan, Cash Mama, Cash Up, Cash bus, Mera Loan and Loan Zone.

The Telangana DGP office said that at least 60 such loan apps were available on Google Play Store and were neither registered nor recognized by the Reserve Bank of India.

Police froze 75 bank accounts which held around Rs 423 crore in connection with the scam. Officials said the scam involved around 30 mobile apps and the companies were charging up to 35% interest.

The plaintiff who led the Cyberabad Police action said he was granted a loan of Rs 30,000 over eight months. Although he only received Rs 20,000 after deductions, he ended up paying Rs 29,000. But the loan was not repaid even then and he was told to pay Rs 8,634 of more, said the plaintiff. He said companies started harassing him and his family members.

Cyberabad Police Commissioner VC Sajjanar said the companies divided the customers into different buckets and practiced different methods to recover the loan. “The less the day after the due date, the less the treatment, otherwise the treatment will be very harsh, threatening and abusive,” he said. “They also access the contacts of customers’ relatives and friends and send them WhatsApp messages defaming the defaulter.”

Officials also identified links to china and Indonesia, according to The Indian Express. “These callers received instructions from their chief in Indonesia,” Hyderabad Police Commissioner Anjani Kumar said. “The entire operation of these loan apps appears to be handled by Chinese nationals at the helm. This was also stated during an investigation into the multi-crore color prediction game app scam where crores of rupees were transferred to front companies registered as NBFCs.

On Wednesday, the Reserve Bank of India warned people against falling for such loan apps. “These platforms charge excessive interest rates and additional hidden fees, adopt unacceptable and overbearing recovery methods, and abuse agreements to access data on borrowers’ mobile phones,” the central bank said.

Sara R. Cicero