Thiruvananthapuram: The Keralites were particularly hard hit during the peak of the COVID-19 shutdown, as hundreds of thousands of people had to return home from abroad, due to the loss of jobs or the quarantine.
The severe financial crisis has led to a new social problem for the state: Hundreds of cash-strapped Keralites who have opted for instant loans through Chinese loan applications now face threats and shame from the media social, leading at least one person to suicide.
Application that traps
India’s central bank, Reserve Bank of India, allows loans to be offered through digital apps by banks and non-bank financial companies, but most scammers operate in parallel, without authorization.
Those who opt for loans through Chinese apps – referred to by that name because the apps are believed to be scammers in China – only get a fraction of the money promised to them, they are charged a processing fee. time of disbursement and repayment decreases. after just seven days.
Those who don’t pay will have their photos shared on their family and workplace social media groups, a tactic that has driven many to despair.
Compromise of personal information
Almost all of these apps require the loan seeker to provide all personal information including their social and work phone contacts, access to social media, and even permission to track their location.
According to Nandakishore Harikumar, CEO of Technisanct, a company that operates in the field of cybersecurity and works with police departments in various Indian states: “These companies obtain a wide range of authorizations from lenders before sanctioning the loan.
“And the police are struggling to file complaints both because the operators behind these apps are difficult to trace and the plaintiffs have in fact given the app company permission to share information with their contacts on them. social networks. “
Threats and shame
As soon as a lender delays the repayment of the loan, threats come from the application company. Non-compliance has serious consequences. Defaulters are humbled by posting details of the default to all of their family and work social media groups.
A young man from Malappuram district who took out an app-based loan and whose repayment was delayed faced the ignominy of scanning his wedding card and sending it to his potential in-laws, showing it as a default.
A social issue
Sebastian Varghese, a financial advisor who is currently helping dozens of people who have encountered problems with Chinese apps, told Gulf News that companies can be really vicious when dealing with their customers who are delaying refunds.
“A teacher in Thiruvananthapuram district had his contacts sent pornographic visuals by the app company. Sometimes the app company sticks a “in default” sticker on the front of the defaulter’s photo and shares it with all of their contacts, ”says Varghese.
Varghese got involved in helping victims of loan applications when some of his own friends got tangled up. “At first I only knew a few, but that was just the tip of the iceberg. Today, over 600 people have contacted me, ”says Varghese, who provides financial and legal services to those who have found themselves in the pitfalls of loan applications.
Focus on South India
One of the hallmarks of the loan scam is that the app companies target people in the southern states of India.
The cases were mainly reported in Kerala, Karnataka, Telangana, Andhra Pradesh and Tamil Nadu. In Telangana, a government official and software engineer committed suicide following harassment from loan application companies.