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Delhi Police arrests 5 behind Chinese loan app for extortion

The instant loan app’s privacy policy had trouble written all over it.

The Delhi Police Cyber Cell arrested five people from Delhi, Haryana, and Uttar Pradesh for allegedly abusing and extorting borrowers of a lending app, the police said in a press release. The extorted amount was being sent to China, the release added.

The app is called Cash Advance Ha, which the police described as an ‘unauthorised Chinese Micro Finance Company’. To install this app which is available online, permissions to access the gallery and contact list on the device have to be granted. Once the user granted access, “all his/her data automatically got transferred to Chinese servers” and the loan amount was disbursed.

The team involved in the operations of the app tracked users who received the loan payout.

“After one day of transferring the loan, the team of accused persons started calling the loan seekers and their known like relative, friends etc through different WhatsApp / mobile numbers to pay the loan… Even after refund of the loan/money, the alleged accused person used to extort more money from the loan seeker and also started sharing vulgar/threatening messages to the family member, relatives and friends of loan seeker to pressurize the him to pay more and more money.” — Delhi Police press release

In the past, several people have ended their lives due to harassment from representatives of predatory lending apps, some of which were found to have ties with Chinese nationals.


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Victims called from fraudulently-obtained numbers 

On March 15, Anurag Halder (a resident of Sodepur, Kolkata) lodged a complaint alleging that his family, friends, and himself were being abused and threatened by unknown people through WhatsApp calls from international mobile numbers. This was after he took a loan from the Cash Advance Ha app.

Based on the complaint, Delhi Police analysed the call data records of the phones that were allegedly used for committing the crime. “It revealed that accused persons were making calls to victims through a fraudulently obtained WhatsApp number and their registered owners were not aware about this activation of WhatsApp from their mobile numbers. Most of these mobile users were from West Bengal and Assam,” Delhi Police said.

The call data records also revealed that one of the accused was located in the Delhi-Gurugram border area. Based on these inputs, police conducted raids at Salapur Khera, Bijwasahan in Delhi, where they arrested 22-year-old Sonu Singh. After interrogating Singh who allegedly worked as a recovery agent for the company, police also arrested Vikash Kumar from Farukhabad, Uttar Pradesh.

“During technical analysis, it was further found that Vikash Kumar was running a team of callers, who used to make calls to the loan seekers/victims who had taken loan from their app. During the analysis of gadgets of the accused persons, it was found that the accused persons used to send threatening messages to the contacts list of victims to extort the victims,” the press release said.

The app’s Privacy Policy had red flags all over

“Privacy policy was hosted on a website which includes collection of data like contacts list, images, SMS, Aadhaar Card, PAN Card, Bank accounts details etc. It is mentioned in the privacy policy of Android application that if user fails to pay the loan amount, they will contact their contacts list persons to recover loan amount,” the press release said.

While carrying out a technical analysis of the app, Delhi Police found that loans could be easily obtained from the app without verification of KYC documents. “Loans were made available in very short span of time, sometimes immediately on a given UPI or Bank accounts with higher interest rate. Small amount of Loan could be disbursed after cut of service charges with higher interest rates, like if Rs.6000/- is loan amount, Rs. 2300/- would be service charge and Rs. 3700/- would be loan disbursed amount,” it said.

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Delhi Police analysed the app for malware and found that data was sent from the app to third-party, China-based servers. The money extorted was also sent to China in the form of cryptocurrency by an accused in the case.

Hyderabad Police busted a similar operation last month

The Hyderabad City Police’s Cyber Crime division arrested two Bengaluru residents for allegedly operating six predatory instant loan apps under the supervision of a Chinese national named Chen Chaoping.

Shabbir Alam and Umakanth Yadav were employees of Koramangala-based Sky Links Technology Pvt Ltd, a firm that was allegedly operating the loan apps — Ocean Ruppee, Life Wallet, Maloo Wallet, Elephant Cash, Box Cash, and Dutta Rupee. When installed, the apps obtained permissions to access the gallery, contact list, and location stored on the device before providing short-term loans, according to a press release.

In 2020, Chaoping allegedly operated a loan apps call centre called Golden Bag Technologies Pvt. Ltd in Bengaluru. Alam worked as a supervisor and Yadav was the IT Manager of the firm. However, when police started to crack down on predatory loan apps in 2020, Chaoping left for China.

“After 2 months the Chinese national again contacted the accused Shabbir Alam and Umakanth Yadav and instructed them to run the call centre by introducing new loan apps.” The apps were allegedly developed by Chaoping. Based on his instructions, the accused hired about 100 tele-callers and established Sky Links Technology Pvt Ltd.

How bad is the predatory lending app problem in India?

SaveThem India, a foundation working to counter the lending apps problem in India, received over 55,000 calls from victims of harassment from the lending app agents up till September last year. Here are the common harassment techniques used by these agents to recover the money:

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  • Late-night calls: Lending apps use automated calling software to harass victims late at night and interfere with their daily lives.
  • Threats to inform contacts: In case the borrower defaults, lending app agents threaten to call the borrower’s contacts or create WhatsApp groups to announce their failure to pay. In some screenshots accessed by MediaNama, such groups were created and images were circulated with ‘420’ or ‘fraud’ written over the victims’ photos.
  • Fake Legal Notices: The app operators threaten to take legal action against borrowers and send fake legal notices with e-stamps indicating stamp duty paid under the registered case to the government.

It’s not just obscure apps

At a time when Chinese lending apps are being criticised for imposing exorbitant interest rates and using predatory practices, fintech company MobiKwik has been accused of resorting to similar, ethically-dubious practices for securing the repayment of a loan availed from its platform.

This particular incident pertains to Bharath C Raghurama, a 34-year-old native of Karnataka who is currently based in Gujarat. Raghurama had availed of an instant loan offered by MobiKwik in December and his repayment was scheduled for the end of the month. But when Raghurama was not able to pay it by the stipulated deadline, he claimed that MobiKwik agents started harassing him over WhatsApp. They warned him that if he is not able to repay the sum as soon as possible, then friends and family would be informed about the situation. They also appended a list of his ‘key contacts’ as proof that they have access to the details of his friends and family.

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Among other subjects, I cover the increasing usage of emerging technologies, especially for surveillance in India

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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