Crackdown on illegal instant loan applications; 17 people arrested in Delhi, Gurgaon, Hyderabad

Cracking down on illegal app-based instant microcredit companies, Hyderabad Police arrested 11 people from Delhi, Gurgaon and Cyberabad Police arrested six others here. Based on complaints, the police in Hyderabad and Cyberabad registered 16 and 7 cases against these companies, respectively.

In the past two weeks, three people, including an unemployed technician and an agricultural extension worker, took their own lives, allegedly due to harassment from representatives of these apps over loan repayments. The Telangana DGP office had said that at least 60 of these loan apps available on Google Play Store were not registered or recognized by the Reserve Bank of India as NBFC and their operations were illegal.

Cyberabad Police, acting on a complaint, raided the city’s premises Onion Credit Private Limited and Cred Fox Technologies Private Limited and arrested CEO and Director K Sarath Chandra as well as two other directors, two agents of recovery and a team leader.

The complainant told police that he downloaded an app named “Cash Mama” in January 2020 from the Google Play Store and uploaded his Aadhaar card, PAN card, self-authentication photo, bank statement for three months, etc., for a loan of 5,000 rupees. to be repaid in 7 days. The company deducted Rs 1180 for GST and processing fees and credited Rs 3820 to its bank account. Likewise, he borrowed six more times from the same app. He told police that he had been suggested similar loan apps like “Hey Fish”, “Monkey cash”, “Cash Elephant”, “Loan Zone”, “Cash Zone”, “Water Elephant”, “Mera Loan “, etc.

Over 8 months, he received a total loan of Rs 30,000 but only received Rs 20,000 after deductions. But he ended up repaying 29,000 rupees, even after which the loan was not cleared. He was asked to pay Rs 8,634 more, after which company representatives started harassing and blackmailing him with dire consequences. They also accessed his contact list from his phone and started contacting his family members and mistreated them in foul language, he said in the complaint.

Cyberabad Police registered a case under Articles 420 (cheating), 506 (criminal intimidation) of the IPC and also invoked Article 66 of the Computer Law, Articles 3, 10 and 13 (1) of Telangana’s Moneylender Law and opened an investigation. .

Cyberabad police send notices to 9 NBFCs

Cyberabad Police Commissioner VC Sajjanar, speaking to the media, said companies collect 35% interest from customers, impose huge penalties on those who fail to reimburse and harass violators. The two companies created by K Sharath Chandra have entered into agreements with 9 NBFCs for customer acquisition, marketing, credit check, loan granting, disbursement and collection. No less than 110 people are employed in these two companies in Hyderabad.

“In this case, notices were sent to all NBFCs and their CEOs, and a notice was also sent to Google to withdraw the requests due to their criminal activities,” the police commissioner said.

The “Dhana Dhan” app is not linked to any NBFC, while the “Cash Mama” and “Loan Zone” mobile apps are linked to 9 NBFCs located in Delhi, Mumbai, Bengaluru and Nagpur. The ‘Cash Mama’ application linked to Onion Credit and the ‘Dhana Dhan Loan’ application and the ‘Loan Zone’ application linked to Cred Fox Technologies have a client base of 1.5 lakh clients, of which 70,000 are active in the ‘present time, said the commissioner.

Different compartments for defaulters:

Speaking about the operations of these companies, he said that the clients are divided into different compartments. Customers on the due date are placed in compartment DO, those in the first three days of the loan in default are placed in compartment S1, those between 4 and 10 days of default are in compartment S2 and those between 11 and 30 days are in the S3 bucket.

“To collect the loan from clients, they practice different methods depending on what bucket they are in, less the day after the due date, less the treatment, otherwise the treatment will be very harsh, threatening and abusive. They also access the contacts of relatives and friends of customers and send them WhatsApp messages defaming the defaulter, ”he said.

Police also discovered that the companies had 2 node bank accounts. One, which aggregates the amounts from the NBFCs and disburses 75-80 percent of the loan after deducting various fees and the like, where the amounts repaid by customers are collected and in turn paid to the NBFCs. No less than 18 bank accounts belonging to these two companies with a crore of Rs 1.52 have been frozen.

Investigators found that the companies owned by Sharath Chandra developed their apps to maintain the customer database and placed them in the Google Play Store for easy download by customers. The two companies, namely Onion Credit and Credfox Technologies have designed mobile applications, namely “Cash Mama”, “Loan Zone”, “Dhana Dhan Loan”, “Cash Up”, “Cash bus”, “Mera Loan” and “Cash Zone”.

They also sold two applications, namely “Cash bus” and “Cash Up” to Asia Inno Networks Pvt. Ltd., Delhi, and two apps, namely “Mera Loan” and “Cash Zone” at Blue shield Fintech Pvt. Ltd., Bangalore.

Hyderabad police suspect China links

Meanwhile, Hyderabad police raided two locations in Gurgaon and three other locations in Hyderabad where call centers were operated on behalf of four companies. These operators turned out to persuade, harass and intimidate defaulting debtors.

Speaking to the media, Hyderabad Police Commissioner Anjani Kumar said these call centers are operated on behalf of four companies: Liufang Technologies private limited, Hotful Technologies private limited, Pinprint Technologies and Nabloom Technologies private limited . They are headquartered in Bangalore and the call centers employed 500 telephone operators in Gurgaon and 600 in Hyderabad.

“These callers received instructions from their heads in Indonesia. The entire operation of these loan applications appears to be handled by Chinese nationals. This was also revealed during an investigation into the multi-crore color prediction game app scam where rupee crores were transferred to front companies registered as NBFCs, ”he said. he declares.

Raids on call centers led to the seizure of nearly 700 laptops, servers, computer systems, etc. Further investigation is underway to uncover the network of financial transactions, funding, technology base, etc., he added.

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