A new challenge in the digital world

A new challenge in the digital world

There are certain dos and nots that everyone must follow to avoid the pitfalls of mobile loan scams

To put things in perspective, here is the real story of Karan (name changed), a salon worker, who lives with his wife and an eight-year-old daughter. He earns a decent monthly salary that covers his daily expenses. About a month ago, he decided to buy a smart TV and a refrigerator. Although these expenses were out of his budget, he went ahead with the purchases anyway.

Unknowingly, he put himself in a financially constrained situation, and the monthly deficit put him in a difficult situation to meet his daily expenses. So Karan started exploring online money loan applications on his phone to relieve himself from the financial stress.

Scrolling through hundreds of options, he came across a mobile application (App), which gave him some lucrative money loan options. Unfortunately, it was a fake mobile loan application, which asked Karan to enter his mobile number, bank account number, PAN and Aadhar details to get approval for an instant loan of Rs 9,000.

To his surprise, the amount was immediately credited to his bank account. Karan was confused by the super fast transaction from the money loan application, which made him aware that he needed to read the details and terms of the loan. After carefully checking the repayment details, he was shocked to find that his loan amount, which had an interest component of a staggering 80 percent, was to be repaid in the next 10 days.

And then his worst nightmare began. He started getting calls from different numbers, saying that if he refuses to pay back the money, he will face various problems, his bank account will be hacked. The fraudsters gained access to his email contacts and phone numbers, his photos and videos, which then threatened to expose his personal details. Karan’s fake social media account was created where the fraudsters started demanding money from his contacts. Even his wife started receiving threatening calls.

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Fearing the worse, Karan approached the cyber cell of the police. But the police refused to file any case, saying that since he was getting calls from different numbers, it was difficult to report the case. He was told to close his bank account, change his mobile number and notify his close contacts not to respond to any “emergency” related to him. Though Karan managed to come out to save the situation, his entire social, personal and financial life got messed up.

Today, thousands of individuals like Karan are being scammed from online applications for money loans and fake calls. Although the government so far has no data on this mobile application’s financial fraud, the situation is alarming. Recently, Chinese loan app scam, which resulted in extortion and harassment of many across India, had created a stir. From Mumbai to Delhi, Bangalore, Lucknow and Hyderabad, daily news reports related to mobile app loan scams have become the order of the day.

While the government and the Reserve Bank of India are still struggling to deal with online fraud, this new challenge of mobile app loan fraud has forced the government to set up a team of IT, finance, legal and security experts to find a solution to find a way out out of this complex situation.

According to the latest government data, cases related to cyber fraud have declined by around 17.5 per cent in 2021-22 to 128 crores against 160 crores recorded in the previous fiscal. Interestingly, fraud decreased, but the number of cases increased. In 2021-22, the Reserve Bank of India (RBI) reported around 9,103 cases of bank fraud across India.

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Recently, many online fraudsters have started using newer ways to target innocent people by refashioning their photos with vulgar images on video calls and blackmailing them into paying money. Dating apps and WhatsApp messengers have become common grounds where unknown people send video call requests and record your live photo/video screen and later use it to blackmail individuals to extort money.

There are certain dos and don’ts that everyone must follow to avoid the pitfalls of mobile loan scams. Do not download unreliable mobile applications, doing so can expose your devices to malware, viruses and spyware attacks and compromise the security of your digital device. Do not upload sensitive information like bank account information, Aadhar or PAN information on an untrusted mobile application. Always use stronger passwords to protect your digital accounts such as email and social media accounts from being hacked.

And the most important lesson is that instead of falling prey to unknown financial sources, always seek financial support from a reputed bank or non-banking financial company or NBFC. As they say, it’s always better to be safe than sorry.

(Sandeep Joshi is a freelance journalist; Appurva Bhandari is a digital security activist)

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