How To Steer Clear Of Chinese Loan App Scam

Internet scams aren’t new in India. Tech-savvy swindlers can get you while buying/selling something on OLX or even trying to connect to a shopping site’s customer care. Regular folks like me get generous offers of $20,00,000 from the great Nigerian Prince over emails. You can’t blame people for believing such messages, when even an award-winning journalist falls for the Harvard phishing racket. The newest scam to affect hundreds of thousands of Indians is much more sinister. Originating from China, this app-based scam not only embezzle your money but also subject you to nerve-wracking harassment. At least six people in India committed suicide due to these extortions. Sure, we are going to tell you how to avoid falling into these virtual traps. But, before that, let’s find out how these scams pan out.

How Do These Scams Work

To target unsuspecting people in need of quick cash, these shady companies make effective use of digital marketing. If you search for words such as “loan” or “quick cash” in Google Play Store, you are most likely to end up with these apps. Based on your search history, you may even see their ads on Google’s ad network including on YouTube. Surprisingly, most of these apps maintain positive reviews on Google’s repository. These fraudsters use content farms to dump thousands of fake reviews every week to bury the genuine feedback.

During the installation, these apps ask permission to access the gallery and phonebook among other things. This surely is a red flag, but sometimes you tend to overlook such detail. To make things worse, these apps are quite polished too. Most victims don’t realise there’s something wrong until it is too late. Like most finance-related services, these apps require you to fill in personal as well as bank account details. They also make users upload important documents such as PAN, Aadhar card, etc.

Once the KYC KYV (Know Your Victim) process is complete, these apps offer “pre-approved” loans in the range of ₹5,000 to ₹50,000. The money immediately lands in your account via Google Pay. What follows in the next few days is absolute torment for the app user. For starters, these companies charge ludicrously high processing fees and weekly interest. To put things in perspective, you may be asked to pay twice the amount you received in a couple of weeks’ term. You may also be charged late fees of up to ₹750 per day. These companies then use their Indian “employees” to threaten the users to pay back the loan. It starts with messages regarding how this loan is negatively affecting your CIBIL (Credit Information Bureau Limited) score. After a day or two, you get messages from people pretending to be anything from a high-ranking police officer to P Chidambaram. The perpetrators ask the victims to download another app to pay off the existing loans. In some cases, people end up installing dozens of apps hoping to get out of this situation.

Remember the gallery and phonebook access these apps ask for? Well, using those permissions, these perpetrators scrape your entire contact list along with your photos from the gallery. If you are a guy, these conmen photoshop you in a news report of a rape case and forward that message to all his contacts. If the borrower is a girl, her photo is morphed into pornographic images and shared with her entire contact list. Moreover, these culprits start circulating the victim’s phone number as an escort. On top of that, there’s a barrage of never-ending calls from random numbers threatening even worse things if the payment is not made. From the extracted data, these crooks figure out the contact details of the victim’s family and begin harassing them as well.

At this point, even if you pay the preposterous amount, the harassment doesn’t stop. In fact, seeing how their scare tactics are working, they simply double down on it. Overwhelmed by the intimidation, most victims give up on their existing phone number and switch to a new one. Due to fear or embarrassment, people don’t usually report such cases to law enforcement officers. This needs to change because this scam is unfurling rapidly. As per the latest report, ED (Enforcement Directorate) spotted transactions to the tune of whopping 1,400 crore rupees. The police department has so far made numerous arrests including two Chinese nationals. To take down more criminals, the law enforcement officers require victims to come forward and provide more details. So if you, or someone you know, have gone through this ordeal, please report it to your nearest police station.

Here’s How To Avoid Getting Scammed

While this scam is definitely scary, there’s no need to panic and get rid of all finance apps from your smartphone. You just need to practice a few precautions on your Android smartphone.

• Never take a loan from an unknown app. Stick to reputed banks such as ICICI, HDFC, Kotak Mahindra, Axis, Bank of India, and SBI. The last one might keep you waiting during lunchtime, but will never scam you.
• If you think you stumbled upon a genuine fintech start-up, look up if it is registered with RBI. You can check such NBFC entities by heading over to this page.
• Try finding the office address of the company you are planning to deal with. Most scam companies won’t have a proper office address.
• Never install finance apps shared over a WhatsApp or Telegram group.

Google and Indian authorities are trying hard to weed out these scam apps from the Play Store. It is a cat and mouse game as once Google deletes these suspicious apps, they resurface with a new name. According to a report, there are over 600 shady apps in Play Store. We are sharing the names of a few so that you can be watchful: FF Loan, Infinity Cash, Bubble Loan, Liquid Cash, Cash Bee, Rupee Factory, Paisa Loan, SnapIt Loan, In Need, Cash Port, Udhar Loan, Gold Bowl, Flash Cash, and One Hope. So far, we haven’t detected any shady loan app in Apple’s repository.