India’s fatal debt trap

Instant Loan App Scam: Have you ever been scammed by an instant loan app? In times of desperate need for money, people often ignore possible outcomes in search of a quick solution.

The instant loan app, which promises generous loans and easy repayment, has become a must-have app for people in financial difficulties. Unfortunately, many people are falling victim to scams related to instant loan apps, with scammers taking advantage of low-income people, underserved women and students.

In shocking circumstances, the scammers have gone too far and escalated to the point where it has led to the deaths of innocent people in debt-ridden India.

What’s the deal with the Instant Loan app scam?

A recent BBC investigation has uncovered deadly scams in India and China using a cruel but simple business model.

Many apps claim to provide easy loans within minutes. Not all of them are harmful, but most of them, once installed, force you to share personal information such as name, address, contact information, photos, ID, and banking details. If you fall into the trap without considering the consequences, scammers may use this information to rob you later.

They create fake instant loan apps, disguise them carefully and promote them aggressively on app stores, social media or third-party websites. They lure victims by promising large loans with simple repayment options.

The BBC reported that a company called Callflex Corporation was hired to recover the money. When a customer misses a payment, the company starts targeting not only the customer but also their contacts. Employees can say ‘anything’ to their superiors as long as they give them orders and repay them.

If customers don’t pay on time, their personal information is shared with call centers where young agents are trained to harass and humiliate people into paying them back.

Even after repaying the loan, scammers continue to extort money by altering users’ photos or videos.

One such gruesome incident occurred in India. The victim, Bhoomi Sinhaa, said that soon after applying for the loan, she received continuous calls from the recovery agent, who later became aggressive, hurling insults and abuse.

Even after paying, he accused me of lying and calling him more than 200 times a day. They knew her address and sent her a photo of her corpse as a warning.

Things got worse when he told her he was going to message all 486 people on her phone, calling her a thief and using derogatory language. They also threatened to defame her daughter and sent fake photos of her daughter to most people she came into contact with.

Does this only happen in India?

The BBC found that in India alone, at least 60 people have taken their own lives after facing abuse, harassment and threats from Chinese lending apps.

These blackmail scams use instant loan apps to trap and humiliate people not only in India but also in other countries across Asia, Africa and Latin America.

Most victims are too embarrassed to talk about the scam, so criminals mostly remain anonymous and hidden.

Despite the increasing number of arrests, these instant loan app scams are on the rise, and many people are losing their lives. The problem still remains. Are people’s lives worth too little for the money involved?

Precautions before downloading the loan app

1. Download loan apps from trusted sources such as Google or Apple Play Store.

2. Some apps may not have passed the company’s review process even if they are on Google and Apple stores, so double-check the app’s functional website, developer email ID, and company domain name.

3. Read multiple reviews about the app before installing or using it.

4. Make sure the app is partnered with an RBI-recognized bank or NBFC.

5. Visit your bank or NBFC website to check whether they are advertising partnerships with the app.

6. Be careful about the privacy rights you grant to lending apps. If it asks for access to your photo gallery and contact list, remove it.

7. Avoid downloading files directly from the public internet as scam apps are often distributed that way.

8. Avoid clicking on loan app ads on Instagram or other social media as many scam apps advertise on these platforms.

So, do you have any other suggestions for preventing instant loan app scams?

Written by Shivani Singh

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