The Cyberabad police on Tuesday arrested six people for running a digital lending app. The police said that the accused had uploaded three apps on Google Play Store. The arrests came after at least three cases of deaths by suicides were reported from Telangana, which include a 23-year-old farmer, a 29-year-old techie and a young woman. The instant loan apps were accused of harassing them with heavy interest rates and defaming them by sending messages to their family and friends, when they failed to repay.
The apps were identified as Cash Mama, Loan Zone and Dhamaka. While the first two have an association with as many as nine Non-Banking Financial Companies (NBFCs), one did not have any approval.
Cyberabad Commissioner of Police (CP) VC Sajjanar on Tuesday said that the harassment of customers was taking place in three steps. He said that the apps are working from Hyderabad's Hitec city in the name of two companies, with a call center with 110 staff members. Sharat Chandra and Pushpalatha established Onioncred Private Limited and Credfox Private Limited along with four others, the police said, adding that they had freezed around Rs 1.5 crore in two bank accounts.
The CP said that the apps were in the Play Store for a year and there were as many as 70,000 active clients from across the country. The CP said the apps would charge 35% interest on the loan and issued penalties for delay in paying the amount.
The police said that the apps make it compulsory to agree to the terms and conditions at the time of installation, which would include taking details of a personal photo identity card, Aadhar Card and access to the contacts in the phone.
Police said that the loan tenure would be seven days and the harassment for collection of due amount would begin on the very next day. "They have three bucket lists (S1,S2,S3) for collection of the total loan. S1 customers, who failed to repay the amount even four days after the deadline will be called and given a warning, and are threatened with legal notices. S2 customers, who failed to pay even after 10 days, will be called and abused in filthy language and intimidated. The apps would send messages to the contacts of the person, labelling them as a defaulter, if they fail to repay and don’t respond to calls,” the Commissioner said.
He added, "This modus operandi is resulting in people taking extreme steps. We have approached the Reserve Bank Of India (RBI) and we are looking into the terms on which the NBFCs have associated with these apps."
The Commissioner said that they would also identify those who designed such apps. "We have already written to Google to find out the terms on which it is hosting such apps. We are waiting for their response," he said.
According to the police, the apps have even sent fake legal notices in the name of the Central Bureau of Investigation (CBI) to threaten their clients. The police said that as many as 50 petitions by victims are under scrutiny while five cases have been registered based on five complaints.
TNM had earlier reported how these apps operate and how there is a lack of regulation, which has resulted in many deaths.