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‘There should be a temporary halt to all quick loan apps’: cybersecurity expert Ritesh Bhatia

The growing number of cases of loan application scams in Mumbai over the past few weeks in which some people have been mentally harassed by recovery agents using their transformed photographs has become a cause for concern. It was only recently that a man from Malad committed suicide in connection with a similar case. Mohamed Thaver talks with cybersecurity expert Ritesh Bhatia about the surge in cases of such frauds and the solution. Excerpts:

There have been several instances over the past few weeks where people have been harassed by micro-loan application collectors. Such a case even led to suicide. Is this a new trend?

No. This is not a new trend as these apps providing micro loans of around Rs 2,000 to Rs 10,000 started during the pandemic when people were in desperate need of money as many had lost their jobs. These lending apps give you instant loans without requiring as much as the KYC details that made them popular. When these apps announced that they would charge, for example, 8% interest, many did not know that it was 8% per day and not per month and as a result, they sometimes ended up charging interest of up to 66 %. If you can’t make the payment, they will keep calling you. Many have taken out loans from another microcredit application to pay for the first one, thus entering a vicious cycle. Sometimes agents also send messages to your loved ones claiming that they have been named guarantors in order to put pressure on people.

Now there are morphed videos of people where their faces are superimposed on naked people being released to shame them into paying.

Yes, now it seems that the desperation to collect the money has increased. Where before they stopped at contacting your relatives and friends, now they go a step further by creating transformed photographs and videos showing these people doing lewd things. These videos are then sent to family and friends. It causes great embarrassment and has even caused people to end their lives. It has become very dirty. The other day, a client of mine said she had received rape threats from these callers. They further told her family and friends that she was involved in a kidnapping racket. She told me she wanted to kill herself.

Have you been able to find which companies are involved in this?

In some cases, a link to China has emerged whereby the collected money was sent to China via cryptocurrency. It is possible that some of the old NBFCs (non-bank financial companies) are receiving support from outside the country to raise money by any means possible.

Recently, Google revised its guidelines to ensure that these unregistered lending apps cannot use its platform…

I don’t know how much this will help because they can even upload the links of these apps on their websites and text or whatsapp the same to you.

So what’s the output?

As these incidents have increased, there should be a temporary halt to all fast loan applications. The RBI is expected to come up with certain guidelines such as publishing a list of 50 registered applications, limits of interest that can be charged and rules for recoupment. They should publicize this so that people are aware. Another important step is that when a person comes to the police with a complaint, there should be no humiliation of the victim. The police should reinforce their courage and tell them not to worry because these people are vulnerable.

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