Shrikar Manne, a resident of Hyderabad, self-employed in the real estate sector, missed an EMI loan payment on April 15 of a loan that he had taken over an instant personal loan application app. What followed, he says, was harassment over the phone by the Mumbai-based firm.
“They invaded my phone, got access to all my contacts and made calls to everyone on my contact list. The firm told my contacts that I had given their names as a reference while taking the loan,” alleges Shrikar, who claims that the firm had made over 200 such calls to his contacts. “It’s illegal and unethical. They defamed me and my reputation everywhere,” he adds.
Shrikar had taken a loan for Rs 50,000 from Kissht, a company that provides instant personal loan payable through EMIs. Apart from instant loans the company also provides instant credit on interest. The company is one of the many such instant loan apps available on google play store and was pushed to Shikar through Makemytrip, the travel aggregator service as part of an exclusive tie-up between the two companies.
Applications that provide Instant loans come under the Non-Banking Financial Companies (NBFCs) category which, like the banks, were allowed to provide borrowers with a three-month moratorium. In March, RBI announced that all banks and lending institutions can allow a three-month moratorium on all term loans outstanding as of March 1, 2020. This includes all forms of retail loans and EMIs. This was then extended for another three months up to August 31, 2020.
However, borrowers claim that several instant loan providers have been pressing their borrowers to cough up their monthly EMIs on time. These companies, which had in past been accused of resorting to intimidation tactics for EMI recoveries, reportedly continued this even during the lockdown when many businesses and jobs have been impacted. Some were even threatened with legal cases.
Thousands of our customers have already availed moratorium and other payment deferment options.
— Kissht #EMIWithoutCreditCard (@Kissht_EMI) April 24, 2020
You can request for the same by writing an email to 'reviews@kissht.com' or sending us a direct message on Twitter with your mobile number and email ID#KisshtSupport #EMIMoratorium pic.twitter.com/Of88JQt9fI
Users of several instant loan platforms have taken to social media over the course of April and May to highlight the various ways that they were threatened and harassed by these app-based loan firms.
LiveMint reported that these credit lending fintech apps are not regulated by the Reserve Bank of India and guidelines on how they operate are ambiguous. However, these lending apps are among the most downloaded in India.
This is total fake information being published, In reality there is no Moratorium provided. Harassment still going on. #OperationHaftaVasooli @RBI
— Samita Shrivastava (@SamitaShri) April 24, 2020
In a 2020 report, AppsFlyer, a marking platform for apps, noted that India has the largest number of installations of finance apps in the Asia Pacific region, with loan apps dominating the number of downloads. About 64% of the total finance apps downloaded in the country were lending apps.
The moratorium service was never communicated
Shrikar says he had all the intention to pay back the loan taken from Kissht, an app that provides instant personal loans payable through EMIs, once his business returned to normalcy.
“I was told that my credit score was good and so am eligible for a Rs 50,000 instant personal loan with a one-year tenure,” says the businessman. He was eligible for the moratorium but claims that he was never informed about the moratorium option being available by the company.
Only given 6 days time name of morotorium and threatning about legal case ,what is this pic.twitter.com/fpnHF24TJg
— Ravi Dutt (@RaviDut79245867) April 24, 2020
Kissht on April 24 tweeted that customers could avail a moratorium by requesting for one through an email or a DM on Twitter.
“But I never received any communication about this via SMS. The only communication I had was them asking if I could pay at least pay one month’s EMI,” says Shrikar, who says he now has no intention to repay the loan after the humiliation.
“I intend to take them to the civil court or to a consumer court for the humiliation they have caused. I have not been able to file a police complaint due to the lockdown,” says an agitated Shikar, who, like others, also took to social media to highlight the harassment.
Many users of the app took to social media to register similar instances of calls to their phone contacts from unknown numbers seeking repayment of EMIs to Kissht. Most did not know how to proceed legally.
Shrikar had to call each of his contacts and explain in-person to a few others that he had not kept them as a guarantee for any loan. “This is for one EMI skip which is embarrassing; it damaged my reputation and it’s not like I wasn’t going to pay,” he adds.
Many others like Shrikar who had taken loans and were unable to pay their EMIs due to loss of income, took to social media pointing out that they were unable to avail the moratorium provided by the RBI.
Dear Customers, it has come to our notice that few of our users have reported receiving late night calls from international numbers asking for EMI payment.
— Kissht #EMIWithoutCreditCard (@Kissht_EMI) April 28, 2020
Please be assured that Kissht never calls their customers from any international number. (1/2)
In response to allegations of harassment of customers by the Kissht customer care executives, the company’s Head of Products and Digital Marketing Manmeet Singh denied any wrongdoing on part of the firm and added that they never stressed on EMI payment despite an option of moratorium being available.
“We have offered moratorium to 1.5 lakh customers. The first announcement by the government was in March, the first few days we were trying to understand the particulars of the moratorium. We had discussions between NBFCs and understood that interest can be borne by the customers and that's exactly what the moratorium really means”.
The firms representative claimed that at no point did they force their struggling customers to make payments. “We realised there was resentment against firms who couldn't offer the moratorium. We also ensured that our line of communication with customers is open. If they reach out to us, we will always respond. We also put forward ways through which they can avail the moratorium,” added Manmeet.
Srikanth L, from Cashless Consumer, a consumer collective focused on digital payments, told TNM that the pressure being felt by borrowers could be a result of these NBFCs themselves having taken loans to provide the loan service in the first place, but may not be eligible for a moratorium themselves.
“For normal people, who take these loans but are unable to pay and face harassment often, going to court would mean they need to take another loan to pay for a lawyer. So, many don’t file cases,” adds Srikanth.
“These firms will put pressure on the collecting agents who have to keep their jobs. Due to pressure, the collecting agents often resort to such recovery tactics,” he says.
Privacy concerns
The researcher warns that these apps, when installed on a phone, collect not just contact details but may also be able to track calls to find who is the most contacted. Some apps are even accused of embedding tracking software inside other apps to monitor spending activity, GPS locations and the data is often used to determine credit worthiness of a potential borrower.
In the absence of any action from the RBI, several Twitter users are also trying to get these apps removed from Google Play Store. Some of the digital loan apps, especially payday loan providers, are available on Play Store despite the Play Store having a developer content policy, barring companies that provide only short term personal loans which require payment in full in 60 days or less from the date the loan was issued.
In response to allegations of the firm collecting phone contact details from its customers, the firm’s representative said, “We don't access the contacts from the phone but we scrap the contacts and check for the keywords, GSP and the total number of contacts and determine the creditworthiness. We do not access the contacts. We take such accusations seriously; we will look into this.”