- Around 15 unnamed borrowers stated to Reuters during its sting operation that many of the apps, which are still listed on Play Store offering loan repayment tenures of less than seven day
- Many of the apps are charging a high processing fee of Rs 2000 on loans less than Rs 10,000 for a period of 30 days
After several warnings by the police department and cybercrime cell units in India around 10 listed loan apps on Google Play Store are said to have infringed the search engine giant’s policy on loan repayment timeline. According to Reuter’s investigation, the fraudulent activities were going on for a long time with millions of downloads, but now it has been scrutinized carefully by the Indian authorities to safeguard the borrowers at risk.
During the end of December 2020, the Greater Chennai Police’s Central Crime Branch (CCB) has issued an urgent warning to the citizens not to give any kind of access to loan apps, and inform the cops if they are at risk. According to the cops, there are more than 60 fake or unauthorized loan apps listed on Google’s Play Store, which are in no way registered by the Reserve Bank of India as an NBFC (Non-Banking Financial Company).
The warning has been issued when a 27-year-old man who is said to have allegedly committed suicide due to constant harassment by people who suspected him to be the representative of the online loan applications.
“If you or people close to you receive abusive or threatening and harassment calls, prefer a police complaint immediately,” the police said
Four of the apps were delisted from the Play Store immediately, while apps such as Extra Mudra, 10 Minute Loan, and Ex-Money did not respond to any calls or emails sent by Reuters. They are not even cooperating with the concerned authorities to burst the racket. Although StuCred and the fourth app were banned from giving loans for a period of 30 days, they are now allowed to operate again in the Play Store. During the investigation, the companies denied engaging in any sort of fraudulent activities.
According to experts, the problem with Google Play Store is that it’s an open platform, and apps are allowed to operate without thorough checks, which is not the case with Apple’s app store. The Cupertino tech firm carefully reviews all the apps before it gives permission to operate on the platform.
Around 15 unnamed borrowers stated to Reuters during its sting operation that many of the apps, which are still listed on Play Store offering loan repayment tenures of less than seven days. In fact, many of them are charging a high processing fee of Rs 2000 on loans less than Rs 10,000 for a period of 30 days. Along with one-off registration costs, borrowers even have the option to pay interest rates as high as 60 percent per week.
Listed banks of India under RBI offer loans of interest around 10 to 20 percent and it is not mandatory to repay the entire amount within a year.
When Google was reached for comment, its spokesperson said, “their policies were continuously updated in response to new and emerging threats and bad actors”.
Pravin Kalaiselvan, who heads a digital rights group, Save Them India Foundation, said to Reuters, “Predatory loan apps with high processing fees, short tenures, and steep penalty charges on default are leading people into a debt trap.”