Loan Apps: Harassment, Blackmail and Suicides Amid Regulatory Inaction

Bharat Kanaiyalal Motvani, a resident of Rajkot in Gujarat who works as a phlebotomist shares a shocking narrative of deceit, harassment and police apathy. Bharat describes how he fell victim to a fraudulent loan app, suffering relentless harassment and torment. Despite presenting evidence and proof, and with the Chief Secretary of the Gujarat government directing law enforcers to take action, no measures were taken on his complaint. As a result, Bharat continues to endure harassment and these loan apps continue to thrive on Google Play Store further victimising more unsuspecting loan applicants. 

"I came across loan apps called Insta Money, Flex Salary and Money View. I was in need of money, so I applied for a loan. I took a 10,000 rupees loan from Insta Money. They deducted around 600 rupees, and I received about 9400 rupees in my bank account. I was supposed to pay the EMIs for three months and finish off the loan. Similarly, I took a 5800 rupee loan from the Flex Salary application and another loan of 15,000 rupees from Money View for a six month EMI duration. I took the money around January 2020, and then the entire country went into lockdown. Everyone was experiencing financial strains. Businesses shut down, and I faced similar problems, which forced me to delay the repayment of the loan," Bharat recounts.

Harassment by Loan Apps and Police Apathy

What happened next is shocking, to say the least. Bharat describes how these loan apps began resorting to blackmail, threats, and torture.

"All of these apps started calling me continuously. Insta Money agents started abusing me. They had hacked into my entire contact list. They had my PAN card, Aadhaar card, and my photo, which they misused. They wrote derogatory things about me with abuses, along with my PAN, Aadhaar card, and photo and then shared it with my relatives and friends using the contact details they had obtained from my phone. This harassment continued for a long time," explains Bharat.

For about four years, Bharat has been tirelessly seeking justice and trying to hold these tormenting loan apps accountable, but his efforts have been in vain. He claims that law enforcers have done virtually nothing to address the issue.

"I tried approaching the police station and requested them to file an FIR. I even went to Gandhinagar with all the evidence, including proof of my harassment and call recordings, but the police did nothing. They told me to just block the number and forget the matter, saying that nothing could be done," Bharat recounts.

Following the police's advice, Bharat blocked the numbers. However, the harassment continued as they started calling from different numbers. The Probe has accessed call recordings and text messages sent to Bharat by these platforms, revealing the shocking lengths these loan apps go to secure their money.

"I have recordings. In one such conversation, they abused me and even told me to sell off my kidneys to repay the loan. These people even called my family members and harassed them as well," states Bharat. 

In one such threat message allegedly from Insta Money, the senders threatened Bharat by naming his closest relatives and saying they would call them. Other messages were filled with abuses and derogatory remarks. One message even went so far as to say that the abuses would be so severe that Bharat would be forced to drink poison and die.

Bharat’s case exemplifies how the wheels of justice only start moving when higher authorities take notice, and even then, progress is often merely cosmetic and superficial, failing to deliver justice to the victim.

After enduring non-stop harassment, Bharat began writing numerous letters of complaint to various government officials, including the police, the RBI, and the Vice President’s office amongst others. However, his efforts seemed futile until his letter to Hurbi Shakeel, Under Secretary in the Vice President’s Secretariat, was transferred by the VP’s office to the Chief Secretary of Gujarat on November 13, 2020.

In January 2021, the Office of the Superintendent of Police of the Cyber Crime Cell, in the CID of Gujarat from Gandhinagar, wrote a letter to Bharat asking him to meet the Cyber Crime Cell officials in person and lodge his complaint. Following the instructions in the letter, Bharat travelled to Gandhinagar and met with Sub Inspector Tushar Pandya from the Cyber Crime Cell. To his dismay, he says the police official listened to his complaint and then informed him that nothing could be done about it, advising Bharat to block all the calls instead. This response left Bharat frustrated and disillusioned wondering why the police wanted him to travel all the way when they had no intention in helping him. 

We spoke to Tushar Pandya, Sub Inspector with the Cyber Cell department of the Gujarat police who Bharat had met with and asked him why his case was not registered. Pandya told The Probe that he doesn’t remember about the particulars of the case as he has been transferred to Botad but he said that there are many challenges involving these kinds of crimes. 

“These people have fake accounts and they use fake ids to create the accounts. Many of these loan apps are illegal and they operate call centres. Some of them operate inside the country while many of them operate outside India. The biggest challenge is they have been issued sim cards in bulk and they keep using different numbers. They use the latest technology to hack into accounts. The cyber crime investigators are still learning how to crack these kinds of cases,” stated Sub Inspector Tushar Pandya. 

When we probed Pandya about why he wrote to Bharat asking him to travel all the way and why when Bharat met with him he said nothing could be done, again Pandya stated that he doesn’t recall the exact facts of the case. “I cant recall the facts of the case. Now, the government is taking a lot of steps and are blocking all these numbers as soon as they get details of such cases.” 

Unfortunately, the people who harassed Bharat still have active call numbers and continue to harass him. Bharat states that he still receives regular emails and calls from these loan apps demanding penalty payments. "I have endured all the harassment and even finished paying off the loans way back in January 2022, but to this day, I get emails and calls from them. Now they are asking me to pay penalties. This is after they ruined my family life, harassed me, my friends, and relatives, and almost pushed me to the wall," Bharat rues.

Some of these loan apps have also sent Bharat legal notices, which he dismisses as fake because none of the contact numbers mentioned in the notices seem to work or are legitimate. For instance, one such legal notice sent to Bharat by the Money View app through Mayank Khera & Associates, a law firm, states: "You may be further liable to pay interest @24% per annum to my client along with the costs towards this legal notice as you have deprived him/it from its legitimate use of its funds by illegally withholding and/or refusing to pay the same. Failing which, my client shall be constrained to initiate civil as well as criminal proceedings, including criminal proceedings as contemplated under Section 138 of the Negotiable Instruments Act, 1881, and Section 25 of the Payment and Settlement Systems Act, 2007, against you, the noticee, before the appropriate court of law, holding you responsible for all costs and consequences which you may kindly note."

However, when we called the numbers listed in the legal notice, we discovered that one number was inactive, and the other belonged to a man named Bablu. Bablu explained that his father uses the phone and that they have no connection with Mayank Khera & Associates. In fact, Bablu works for a beverage company, completely unrelated to the law firm mentioned in the notice.

Digging deeper into the Money View app, we uncovered some revealing details. In 2022, while Bharat was enduring harassment from various loan apps, a person in Godavarikhani, Telangana, took the extreme step of ending his life. 

A media report states: "Prasanth lost his money in cricket betting. To cover the losses, he took a loan of Rs. 60,000 from the Money View app. When he was unable to repay the loan amount on time, the organisers of the app started abusing him in filthy language. They morphed Prasanth’s photo and added his image with a photo of a naked girl, sharing it with his relatives and parents. Unable to bear the torture by the app organisers, Prasanth left home on July 7 without informing his family members, reached Raghavapur after two days, and ended his life by falling in front of the Kerala Express Train."

When we checked the Google Play Store, we found that all the three apps are still available for download on Play Store. Strangely, Money View is endorsed by none other than actor Ranbir Kapoor raising serious questions about the oversight and regulation of such apps, as well as the ethical implications of celebrity endorsements for businesses that are allegedly using illegal means to extract payments from consumers. 

Sumit Chakraborty's Ordeal: Harassment and Systemic Failures

Like Bharat, Sumit Chakraborty also shared his harrowing experience with The Probe, detailing how his wife, Sayantika Chakraborty, was harassed by a loan app. "We had applied for a loan of 50,000 rupees, but there was a problem with the paperwork. So, we decided to cancel it. We even sent emails and messages requesting the cancellation of the loan. Despite this, they transferred the loan amount into our bank. For the first couple of months, we repaid the loan, but then, unfortunately, my wife lost her job. So, we were unable to repay. They called us and offered to restructure the loan, but when they did, they increased the loan amount. This made things more problematic but we still started making the payments," states Sumit.

What happened next followed the same distressing pattern. Sumit adds, "My wife was admitted to the hospital with dengue. Her platelet count was dropping steadily, and I was running around all day to arrange blood for her. I informed them that there would be some delay in the payment. They called me and started abusing me. They sent me pictures of my mother and my wife and threatened to morph the images and ruin their reputation. They called my parents and her parents and began abusing them as well. All this happened when I delayed the payment by just a couple of hours, not even a couple of days. Within one hour, I made the payment, and then the harassment stopped, but the damage was already done by then," Sumit recounts.

Sumit’s wife had taken a loan from the CASHe loan app. Their website mentions that CASHe is owned by TSLC PTE Ltd, a Singapore-based company, which has licensed the CASHe mobile application to Aeries Financial Technologies Private Limited for perpetual and exclusive use in India. In turn, Aeries has sublicensed the CASHe mobile application to its wholly owned subsidiary, Bhanix Finance and Investment Limited, which is an RBI-registered NBFC.

“How is the ‘so-called’ RBI registered NBFC firm indulging in such illegal activity?" asks Sumit.

Sumit states that he had sent an online complaint to the cyber police in Kolkata but did not receive a response. He also went to the Kolkata police to lodge a complaint, but they did not accept his complaint and instead blamed him, questioning why he had applied for a loan through that particular app. He also wrote to the RBI but did not get a satisfactory response. "All that happened was that after a few days, to whitewash the whole incident, the company called me and said they had terminated their contract with the third-party vendor and would lodge an internal inquiry. This is such a farce," Sumit expresses.

Exploitation, Harassment, and Tragic Consequences

Pravin Kalaiselvan, Director of Save Them India Foundation, a cybersecurity activism NGO advocating for data protection and privacy, asserts that this issue is a massive scam not confined to just a few loan app-related companies. "This is a widespread problem that requires immediate attention and stringent action to protect consumers from such predatory practices," he states.

"During COVID in 2020, many people were in desperate need of money because they lost their sources of income. As a result, many Chinese loan apps began their promotions on YouTube, Facebook, and other platforms. If you search for loan apps, cookies will capture your data, and you'll start seeing those advertisements as you browse the internet. These apps were promoted by promising instant loans without any collateral. When people install these loan apps, they immediately access their contacts, location, photos, messages, and other personal data. Once they have this access, it becomes easier for them to start blackmailing people in case of a loan default or delay," explains Pravin.

Pravin adds, “Many of these loan apps keep increasing the interest rates, sometimes by the hour or by the day, which is completely illegal. They exploit the vulnerability of middle-income and low-income Indians.”

Pravin also notes that the modus operandi of these loan apps has evolved, becoming more notorious each year. “In 2020, they would blackmail you with your contacts but wouldn’t call them. In 2021, they started calling the contacts and harassing them as well. By 2022, we saw cases where they would send Aadhaar card and PAN card details of the victim to their contacts, labelling the victim as a thief or liar. In 2023, they became even more notorious, morphing victims’ images into nude photos and sending them to their contacts. This form of online sexual humiliation has led to an increase in suicide cases.”

Nikkhhil Jethwa, Founder of the Loan Consumer Association of India (LCAI), states that the severity of these cases has led to a steady increase in suicides. He recalls a tragic case in 2022, when Sandeep Koregaonkar from Mumbai hanged himself after repeated harassment from loan recovery agents. Jethwa's organisation took up the matter with the local police. "We gave the police an ultimatum and told them they must take action. We created massive awareness and launched campaigns, building pressure on the police, which finally led to an arrest. When one person was arrested, the Mumbai police obtained more details and then busted a racket. But this was just a one-off case. The reality is that scores of people have been harassed and a large number of people have committed suicide but most cases don’t get solved. The complaints don't even get registered," says Jethwa.

In February this year, the government reported in Parliament that Google had removed more than 2,200 digital lending apps (DLAs) from its app store between September 2022 and August 2023. Bhagwat K. Karad, the Minister of State for Finance, stated that, based on information from the Ministry of Electronics and Information Technology (MeitY), Google reviewed approximately 3,500 to 4,000 loan apps from April 2021 to July 2022, suspending or removing over 2,500 of them from the Play Store. However, many loan apps that are using illegal means to do business and scores of other illegal loan apps continue to thrive on Google Play Store.