India has banned as many as 600 Chinese loan apps.
A fraud of Rs 300 crore through 15 fake Chinese applications has come to light after the Uttarakhand police busted a syndicate of cyber criminals where callers were offered low-interest rate loans.
The "cyber thugs" would also blackmail victims by sending obscene pictures to their families which they would download by remotely accessing their phones.
"The Uttrakhand police busted a syndicate where cyber thugs used to send messages to people, asking them to download their mobile apps, and would offer low-interest loans. In this process, they would get access to their photo gallery and documents too which is used to blackmail them to extort money," the Director General of Uttrakhand Police Ashok Kumar told NDTV.
Ankur Dhingra from Delhi, who started a shell company, Hector LendKaro Private Limited, was arrested by the Uttarakhand Police.
The shell company used to offer loans at low-interest rates through Chinese loan apps; RupeeGo, Rupee Here, LoanU, QuickRupee, Punch Money, Grand Loan, DreamLoan, CashMO, Rupee MO, CreditLoan, Lendkar, RockOn, HopeLoan, Lend Now, Cashfull.
The Uttarakhand Police top cop said these loan apps were earlier present on Google Play Store but after a crackdown by Google, the "cyber thugs" started using WhatsApp/SMS and other platforms.
India has banned as many as 600 Chinese loan apps.
The Centre has asked law enforcement agencies to take strict action against Chinese loan apps that often target the elderly, young, and people living in rural areas.
A senior official heading the cyber unit in Delhi said many people taking these loans "don't understand the terms and conditions and are unaware of extremely high-interest rates."
Chinese loan app firms would use illegal and predatory practices to recover loans from the victims, the official added.
The companies use the personal data of a user, including their photos and contacts to force them to pay money.
The contacts of the user who has taken loans were often called and threatened by the companies, the official said.
Several First Information Reports (FIRs) have been registered against such companies and action has been taken against some firms by the Enforcement Directorate and their bank accounts have been frozen as well.