- Priti Gupta and Ben Morris
- From BBC News to Mumbai
When Raj took out a $110 loan last March, he thought his financial troubles would be resolved quickly. But that was not the case.
The man, who lives in the Indian city of Pune in the state of Maharashtra, is one of hundreds of victims of the internet lending scam that is growing in the country.
Like many people, Raj (pseudonym) was drawn to the speed and ease of credit approval – all he had to do was download an app to his phone and provide a copy of his ID .
He even received money, but only half of the requested amount. And, three days later, the alleged company began demanding that he pay three times the amount borrowed.
The man then decided to use other apps to try to pay off what he owed, which ended up increasing his debts exponentially. Until at one point Raj owed over $6,000 on 33 different applications.
The scammers even threatened him by demanding payment. Raj claims not to have gone to the police out of fear.
Through the apps the hackers had access to all the contacts and photos stored on the phone and threatened to send photos of his naked wife to all the numbers registered on the cell phone if he did not pay them what they demanded .
The man then decided to sell all his wife’s jewelry to pay off the criminals – and says he’s still scared.
“I don’t think they will leave me alone. I fear for my life. I get threatening calls and messages every day,” he says.
This type of scam has become common in India. Between January 2020 and March 2021 alone, a study by the Reserve Bank of India (RBI) – the country’s central bank – identified 600 different applications for illegal loans.
The western state of Maharashtra recorded the highest number of complaints related to loan applications: 572 were reported to the RBI.
“These apps promise hassle-free loans, quick cash and people are lured in without realizing that their phones are hacked, their data is stolen and their privacy is compromised,” says Yashasvi Yadav, Special Inspector General of the police at Maharashtra Cyber Crime Bureau.
“I think the scam is spreading because a lot of people in India are not eligible for loans in the traditional banking system.”
Many applications run on servers in China, even if the scammers are in India, explains the inspector. Some of the criminals have already been identified by police by tracing their bank accounts and phone numbers, Yadav adds.
A con man the BBC report spoke to, however, said it was relatively easy to evade detection by the authorities.
“App developers, or the people like us who work for them, are very hard to trace. We all use fake documents to get a cell phone number.”
“We operate all over India. Most of us don’t have a fixed place of work. All I need is a laptop and a phone connection. Someone like me has more than ten different numbers to use to threaten the customer.”
This particular scammer said that “employees” are trained to find “naive and needy” people, who only receive half of the requested amount in funding. As in the case of Raj, the scammer will then demand payment of three times the amount sent. If the victim does not pay, the pressure on them quickly builds up.
“The first step is to annoy. Then to threaten. And then the game of blackmailing the person begins, with the access we have to the phone data,” he says. “Many don’t go to the authorities out of shame and fear.”
The BBC has had access to some of the messages sent to the victims. Some threaten to tell their family and colleagues about their debts, others more aggressive contain threats involving deep fakes – produce and broadcast pornographic videos using the image of the victim’s face.
The government tried to stem the crime tide by asking Google in May last year to analyze the apps available on its app store.
Almost all smartphones in India run on the company’s operating system, Android. Even after being removed from the platform, however, the scammers continued to claim victims, this time using text messages to advertise the apps.
After the publication of its study, the Indian Central Bank asked the government to come up with new proposals to try to contain scams involving loans on the Internet. The entity was willing to use part of its framework to verify applications. The government should react in the coming weeks.
For some, however, the new rules will come too late. According to his family, Sandeep Korgaonkar committed suicide on May 4 due to threats and harassment he suffered from scammers behind loan apps. According to his brother Dattatreya, Sandeep didn’t even apply for credit, only downloaded the app.
The criminals began calling Sandeep’s colleagues saying he was in huge debt and manipulating photos of him to create fake nude images – which were passed on to 50 of his contacts.
“The harassment didn’t stop, even after he filed a complaint with the police,” Dattatreya said. “His life became hell, he couldn’t sleep or eat.” Indian police are investigating the case.
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