Chinese loan app steals over Rs. 10 crores as part of latest online scam! Know all about it here

In a shocking incident, police have arrested four people in connection with a Chinese loan app racket that stole more than Rs. 10 Cr from victims by threatening and abusing them. Know how this online scam worked.

Four have been arrested by police after a Chinese loan app scam surfaced. Victims have lost a total of Rs. 10 Cr from the online scam. (Alex Green/Pexels)

Loan scammers are heavily relying upon digital infrastructure to propagate the crimes and swindle victims in a wider geography. In a recent incident, a loan app has surfaced which would scam people by promising easy payout without paperwork or credit scores and then operators of the online scam would harass the victims through threatening messages, calls and derogatory texts to their contacts to recover an extremely high amount of money. Police have arrested four people recently in association with a similar loan app which reportedly has connections with China. Read on to know how this Chinese loan app worked and how you can protect yourself.

According to a report by the Times of India, Delhi police raided a three-storey building in Dwarka Sector 7 and arrested four people accused of running the loan scam. It is believed that the four were tasked with recovering money from those who took out a loan from the app. According to Police, the kingpin of the operation was also among those arrested.

How this online Chinese loan app scam worked

The modus operandi of this loan scam is very basic, as explained by the Times of India. First, this alleged Chinese loan app was promoted on Facebook and other social media platforms and it made big promises of disbursing instant loans without any paperwork or requiring credit scores. Once a person downloads the loan app, they are asked permissions for accessing contacts, photographs etc. After requesting a loan, an amount of Rs. 6,870 would be paid out to the victim minus the processing fees. The instant payout would make the victim happy, but this happiness would be very short-lived.

Calls for repayment of the loans would soon begin and the scammers would charge extremely high interest rates, making the total amount a high sum. According to the TOI report, victims were usually asked to pay Rs. 1 lakh on a loan of Rs. 6,870. If the victim refused to pay the amount, the loan app scammers would begin harassing and threatening the victim on calls and texts. The scammers would even send out the messages to the contacts of the victim and send them derogatory messages.

According to police, the arrested gang allegedly was working for a Chinese loan app firm and have extorted more than Rs. 10 crore from victims. “The telecallers used to threaten the loan fraud victims in order to extort money from them. They morphed the photographs of the victims and their relatives, sometimes even using the photographs from their Aadhaar and PAN cards. Under pressure, the loan takers paid back several times the amount they had borrowed,” a police officer told TOI.

How to protect yourself from online loan app scams

Step 1:

Do not download any financial apps unless you recognize it to be from a secure source.

Step 2:

Always try to find out if the digital loan app is backed by a physical bank or is registered as an NBFC, as only they are allowed by the RBI to disburse loans.

Step 3:

Never give these apps any extra permission like contacts, location etc.

Step 4:

Try not to fall for easy repayment schemes and low interest rates. If you have to take a loan, always go through authentic channels.