As Crackdown On Loan Apps Continue, Telangana HC Orders Cops To Block All Such Illegal Apps

The Telangana High Court has asked the Director General of Police to take immediate steps to block illegal instant loan apps that had become infamous in the state and elsewhere in the country.

The court said the police should take strong measures to check the loan apps indulging in illegal practices.

A division bench headed by Chief Justice Hima Kohli, gave the direction on a petition seeking action against the apps for harassing borrowers.

Reuters

Lawyer Kalyan Deep, who filed the petition, pleaded for stringent action against the apps as their harassment is leading to suicides by borrowers.

Court asked for report on action

The court also asked the DGP to submit a report on the activities of loan apps and action taken against them.

The petitioner had sought a court direction to the state government to ban all illegal online loan apps available on the Google Play store.

Reuters

Google had taken off 100 such apps

Google had recently announced that it had removed around 100 such personal loan apps from its play store for violating user safety.

The instant loan apps, including several of them with direct or indirect Chinese links, had become popular in India following the lockdown.

Many people who lost their jobs and incomes due to the lockdown turned on to such shady apps that were offering instant loan approvals without any verification or background checks.

BCCL

The borrowers were asked to upload copies of their Aadhaar and PAN cards, for verification and after the deduction of processing fees, the loaned amount was credited to their account.

The time to repay the loans was between 1-3 weeks, and even before the deadline, many users alleged that they were bombarded with reminder calls.

However, these calls turned into harassment and threats once the borrower failed to repay on time.

Many also alleged that the loan providers had gained access to their contact list and phone's gallery through the app.

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They then used the photo of the borrower to create a WhatsApp group and add their contacts, especially a family member or colleagues to tell them that this person has defaulted on his loans and is a cheat.

The operations of the loan apps came under the scanner in December after the suicide of five persons in Telangana over harassment.

Since the crackdown began 50 cases have been registered in Telangana alone.

During the last one month, more than 30 accused including four Chinese nationals were arrested by Hyderabad, Cyberabad and Rachakonda police, the three commissionerates which cover Greater Hyderabad.

Reuters

The first arrests were made on December 22 during the crackdown by Hyderabad and Cyberabad police on five call centres in Hyderabad and Gurugram.

The police found in their investigations that the companies were offering small loan amounts through different apps and collecting repayments by way of harassment and blackmailing.

Preliminary investigations revealed that about 1.4 crore transactions worth nearly Rs 21,000 crore have taken place so far.