OPED By Vaishali Basu Sharma
Last month Indian law enforcement apprehended 12 people from the National Capital Region for running an extortion racket in the garb of a Chinese lending application.
These loan rackets primarily operate via phone apps easily downloaded on the Google Play store. Offering easy loans with no paperwork, as low as a few thousand rupees, the loan app hacks the user’s phone, steals all data and contacts, and begins a tormenting cycle as the representatives of the loan apps employ high-handed collection strategies.
How Chinese Microloan App Scams Work
The popularity of these micro-credit loan apps can be traced to pandemic-induced lockdowns and economic slowdown, which saw large-scale layoffs and pay cuts.
In one of the steepest declines, India’s Industrial Production fell by 16.7% in 2020, exposing many workers to job loss. The poorer sections of society felt the worst effects of this.
Micro-credit or small loan serves as indispensable supplementary loan for people lacking verifiable credit records or unqualified to get conventional bank loans. Marginalized by banks and other financial institutions, many became easy targets of fraud lenders.
There is no dearth of Chinese scammer apps offering small loans on the Play store to those who may find it challenging to get loans from a bank or a trusted non-banking financing company (NBFC). Thousands of unsuspecting Indians have fallen prey to illegal, unlicensed, and fraudulent lending apps from…
