Representative image of social media platforms where fraud loan apps are masquerading as genuine.
Credit: iStock Photo
With the internet bringing almost everything in the range of one's fingertips with ease, the darker side effects of the ease of social media has also brought in focus the rising incidents of fraud loan app scams. A report in The Indian Express cited a case of a resident of Uttar Pradesh's Ghosi village named Bharat Singh, who borrowed Rs 15,000 from a loan app he found on Instagram. Named as UnicashX, there was no way to know if this was fraudulent or not and the app claimed it was backed by an non-banking financial company (NBFC).
But soon Singh started getting harassed to return the money and the app demanded Rs 50,000 back, and upon returning only the borrowed money, he received threatening messages on WhatsApp, the report quoted Singh as saying.
The digital lending market has been seeing an annual growth rate of almost 40 per cent, the report quoted Experian, a credit information company, with most of them comprising of real fintech companies supported by NBFCs and banks. But what cannot also be denied is that there is no regulatory norm which allows these fraudulent apps to function aggressively.
Earlier this year, Google released the report on bad apps and data on loan apps.
The search revealed that it prevented more than 1.43 million apps from entering the Play Store, as they violated its policy.
More than 173,000 fraud developer accounts and was able to prevent $2.3-billion worth of fraud transactions around the world.
What makes matters worse is that the Reserve Bank of India doesn't have a list of registered loan apps or a negative list which is updated as these fake apps keep mushrooming every other day.
These apps mostly function online and use platforms like Meta, Google and Apple app stores and WhatsApp where they advertise their apps which eventually lead to frauds of these kinds.
Incidents of such fraud loan apps harassing people have become very commonplace. Last year, reports said how a 52-year-old bank employee allegedly killed himself as he was harassed by the representatives of mobile applications that had lent him around Rs 40,000.