Blackmail, suicides to nudes, 10 things to know about the horrifying instant loan app scams

A number of instant loan apps have proved to be horrifically predatory and have destroyed the lives of those who were unlucky enough to borrow from them. The scamsters use harassment, humiliation, and blackmail to force victims to pay.

Often, these scammers force victims to repay the loaned money at ridiculously high interest rates, and if they refuse, they would threaten to share their Photoshopped nudes on pornographic websites and their contacts. (Pexels)

Online scams are not a new thing and have existed for long, harking back to the days of emails when the infamous ‘Nigerian Prince' spam mail was sent to trap innocent victims. However, in recent times, the scammers have grown more vicious and nefarious in their ways. One such example is the instant loan app scam. These are the apps that offer instant, hassle-free loans to people in need of money but they charge a much higher rate of interest than banks. While not all such apps are predatory, many of them are. The scammers behind these apps use every trick in the book from harassment, humiliation, and blackmail to make victims repay the money with a ridiculously high rate of interest. Check these 10 points to know how they operate and how to protect yourself from them.

Recently, BBC conducted an undercover investigation in India to expose the modus operandi of these cybercriminals. The report highlights as many as 60 Indians have been pushed to suicide after they were unable to handle the constant harassment, abuse, and blackmail.

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Instant loan app scam - 10 points

1. These apps offer loans without any due diligence, or paperwork, and offer the money within a few minutes, which makes them a lucrative proposition to those who are in desperate need of financial assistance. However, not all that glitters is gold.

Even when such scam apps disburse the loan amount after you install it and fill out a basic digital form, the money received is often much less than what was promised. The app does not disclose it upfront, and instead later explains it away as processing fee and other operational costs.

2. But the nefarious activity takes place in the background, as many such apps often steal photos of the users, their contacts, and even ID cards from their phones. But this is merely step 1 of their entire process and these are later used to extort money out of the victims.

3. The average loan period for such apps is about 7 to 10 days. However, once the loanees fail to repay such a high amount on time, or even when they do, the scammers behind the operation, take the next step. As per the BBC report, the apps “share this information with a call center where young agents of the gig economy, armed with laptops and phones are trained to harass and humiliate people into repayment”.

4. BBC highlighted the story of Bhoomi Sinhaa, a Mumbai-based property lawyer and a widow raising a daughter alone, who fell for such instant loan apps. After she failed to repay the amount in 7 days, she began getting incessant calls from scammers who began harassing her nonstop, hurling abuses, and even blackmailing her by reaching out to her contacts as well.

Even after she repaid the amount, some of the loan apps kept harassing her to the point they even shared a Photoshopped nude photo on a pornographic website.

5. This kind of harassment can be extreme for anyone. Many suffer mental breakdowns, panic attacks, and develop acute anxiety from the constant ringing and buzzing of the phone. BBC reports that as many as 60 people in India have been forced to commit suicide after going through such abuse for months.

6. Shockingly, such scams are not just operating in India, but as many as 14 different countries. The organizations that operate such scams at scale openly use shame and blackmail to force the victims to give up all their savings.

7. Due to the nature of the scam, most people are ashamed of speaking about it and seeking help from either family, friends, or authorities. And once the cybercriminals begin calling them as well, the pressure grows manifold.

8. However, it is not too difficult to protect yourself from such scams. All you need to do is not trust any app that promises ‘hassle-free' money without due diligence. Even if you do need to get a loan from loan apps, always make sure whether it is an NBFC-registered entity or not. Companies that are not registered with NBFC are not eligible to disburse loans.

9. If a loan app is not registered, you should stay away from it. In fact, don't even download it. They may still extract your data without you taking a loan. Always prefer only banks and similar institutions if you do need to take a loan.

10. But if you have already taken a loan from such a loan app, make sure to register a complaint at your nearest police station immediately. The scammers use shame as a weapon against you, so never give in to their pressure and always reach out to authorities who can protect you.

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