What are instant loan apps and their connection to China?

The arrest of a Chinese national, Wan Chenghua (32), by Chandigarh police on Monday, September 12, along with 20 others for allegedly blackmailing and extorting money from people through mobile apps instant loan has raised several concerns. Chandigarh Cyber ​​Cell officials say the racket of tricking people into taking instant loans through mobile apps and then extorting money from them has gained momentum during the Covid-19 pandemic.

How do instant loan mobile apps work?

These mobile apps provide small amounts as instant loans at a higher interest rate ranging from 15% to 20%. These apps do not follow the strict procedures followed by banks before granting loans, such as customer verification.

A person who installs the app and wants a loan must fill out an online form. To obtain the loan, the mobile user must authorize the application to access the contacts, photos, videos and other digital content of the mobile phone. Many mobile apps provide the loan amount after deducting interest from the principal amount. Some of the apps even collect interest on a daily or weekly basis.

Are these apps illegal?

Gurcharan Singh, Head of Cyber ​​Faculty at Central Detective Training School (CDTS), Chandigarh, said: “Up to 90% of these mobile apps are illegal. The Reserve Bank of India has no control over these. These apps are a way to extort money. Application handlers, operating through call centers, access borrowers’ digital content. When the borrowers fail to repay the money due to the high interest rate, the managers transform their photos and distribute these transformed images to all the person’s telephone contacts, thereby defaming them”.

He said while these apps are often set up by Chinese companies, the callers used to trick borrowers are often Indians.

When did this trend start and how many such cases have been reported in Chandigarh?

According to Chandigarh Cyber ​​Cell officials, this trend of providing instant loans and extorting money gained momentum during the pandemic and continued thereafter. In Chandigarh alone, more than 150 complaints of extortion and blackmail through instant loan mobile apps have been filed.

In February this year, two Chinese nationals, along with 115 Nepalese nationals, were arrested in Nepal for their involvement in running a fraudulent online loan scheme targeting Indians.

Who is Chinese national Wan Chenguha arrested by Chandigarh police?

Wan Chenguha came to India in 2019 on a work visa. He has been staying at different places in Delhi and Noida despite his work visa expiring in 2021, Superintendent of Police, Chandigarh Cyber ​​Cell, Ketan Bansal said. Among those arrested with him are Parvaj Alam, alias “Jeetu Bhadana” from Jharkhand, who operated at least five instant money lending apps, police said.

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