People across Telangana are registering at least one or two complaints against loan apps every day after borrowing through them.
(Representational image/Creative Commons)
The cops at the Alwal Police Station in Secunderabad — the twin city of Telangana’s capital Hyderabad — recently solved a close with some baffling twists and turns.
It started with a complaint of gold theft, but ended with the arrest of two youngsters who were trying to pay off a loan they had taken from a mobile application or app.
The investigating officer (IO) told South First that the cops arrested two undergraduate students while probing the gold theft.
He said: “We asked the duo why they stole the gold, and they pointed to their debts on loan apps.”
Apparently, collection agents from the apps were pressuring them to return the money, which they did not have.
Hence they resorted to theft, said the IO. He, however, also noted that this case paled in comparison with some others registered across the state, where the borrowers had resorted to much more extreme steps, like ending their lives.
Clearly, this was not an isolated incident: Individuals taking loans from both authorised and unauthorised apps were struggling to repay them.
Some borrowers said they believed the repayment amounts had been unfairly inflated by the end of the loan period, leading to extreme stress and in tragic cases suicide due to relentless calls from the loan app operators.
Others resorted to criminal activities — as was the case with the above-mentioned undergraduate students — to repay their debts.
So, where does the problem lie? Is it a matter of increasing public awareness or requiring more police action? Are these online applications too freely available, with insufficient investigation to warn the public?
South First researched First Information Reports (FIRs) involving such loan apps in both cities and districts across Telangana.
What surfaced was the fact that at least one or two cases of people across Telangana every day registering complaints against loan apps after borrowing through them.
Worryingly, that daily rate was five to six cases of people making investments based on advertisements on social media and later getting to know that it was a fraud.
In the last two months, there have been at least two deaths related to loan apps in Telangana.
An undergraduate in Sadasivpet of the Sangareddy district and a postgraduate in Warangal took the extreme step after reportedly being continuously called up by loan app operators.
One of them Vineeth, whose grandfather Chintha Venkatesham told South First, “Vineeth was good in academics. He wanted to travel to the US for further studies.”
He added: “We are not aware of where he applied for a loan; he did take money from home. We suspect he was paying somebody.”
Vineeth’s brother noted, “He was stressed over the repayment and getting selected in various universities in the US. He would have been in another country if he had not ended his life.”
The brother, not wishing to be identified by name, noted: “No individual has come to us for money after his death.”
He also said: “There are reports that he was involved in IPL betting, but I would like to clear the air and deny all these allegations. Police have closed the case.”
The other case was that of Kambampati Vishnuwardhan, who was pursuing an MBA when he ended his life.
His father Kambampati Yakaiah explained to South First: “My son was active in academics. He borrowed ₹28,000, but it seems the repayment amount went up to ₹50,000-60,000.”
He recounted: “I kept observing him talking continuously on calls and becoming stressed. So, I sat him down and had a conversation.”
Yakaiah recalled: “He said he borrowed money to lend to his friends. They delayed the payments, and the loan amount on the app skyrocketed. This was despite the fact that he was making payments from what he earned from his part-time job in a medical shop.”
He said: “I told him to let the loan app operators come home, and that I would talk to them and repay the complete amounts. He sat for the college exam, returned home, and chose the suicide route the next day.”
He also said: “I wished to talk to his friends who borrowed money and include their names in the FIR. However, my relatives and villagers counselled me that those young people would also choose the path of suicide if named them in the case.”
Yakaiah claimed: “I was told that the loan operators had come as far as the border of my colony asking about my son. However, they ran away as soon as they were told about his suicide.”
He said: “I did want to complain against them as well, but police insisted that going after them would be a long process. So, the case has been closed for now.”
Hyderabad City Police Deputy Commissioner of Police (DCP) for Cybercrimes D Kavitha said the number of cases registered against loan apps had been relatively low the past two years.
“There are deaths by suicide because individuals are subjected to tremendous pressure to repay the loans,” she explained.
“The investigation takes more time compared to other cases as these operators are sitting in a different place and explain that they are just approaching the clients to repay as money has been taken,” she noted.
In a few cases, the loan offers start from lower amounts, such as ₹5,000-6,000.
Even after this sum is repaid, the app’s employees allegedly keep calling the clients for extra amounts, which is extortion.
By the time the clients realise that this is a fraud, additional amounts are being asked with steeper interesting rates.
The people behind such apps allegedly collect details of the individuals while giving loans, and keep a tab on their social media handles.
They also reportedly download the clients’ pictures, morph them, and extort the candidates, which leads to the victims losing confidence.
Telangana Police said at least 197 such fraudulent loan apps have been deleted overall in India.
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