The Ministry of Home Affairs (MHA), in a letter, has asked states and union territories (UT) to pay “urgent attention" to illegal digital lending apps that are “leading to multiple suicides by citizens owing to harassment, blackmail and harsh recovery practices".
The ministry has said this issue has a serious impact on national security, economy and citizen safety.
The letter accessed by News18 stated: “These predatory illegal lending apps may not be regulated entities (re) by RBI are using bulk SMSes, digital advertisements, chat messengers and mobile app stores on a massive scale."
The Home Ministry is in the process of banning such apps and some of them are expected to be banned soon.
NEWS18 SERIES
News18 recently published a series on illegal lending apps and revealed how they use a web of illegal shell companies and target people to extort illegal money. Some of them have even died by suicides.
News18 has already reported that the MHA was starting a programme to educate people about such apps and will communicate it to the states. The government has opened investigations on various fronts and taken various measures against the predatory loan apps.
‘HARSH RECOVERY PRACTICES’
“Large number of complaints have been reported across India pertaining to illegal digital lending apps, that provide short term loan / micro credits at exorbitant interest rate with processing / hidden charges, especially to vulnerable and low income group people and use borrower’s confidential personal data like contacts, location, photos/videos for blackmail/harassment," the MHA said in its letter.
“Harsh recovery practices followed by these illegal lending apps have claimed many lives across India. This issue has caused serious impact on National Security, Economy and Citizen Safety," the letter stated.
“It has been learnt that these illegal lending apps that may not be Regulated Entities (RE) by RBI are using bulk SMS, digital advertisement, chat messengers and mobile app stores on a massive scale. Borrower has to provide mandatory access to contacts, location, phone storage in order to avail loan. This data is misused to harass and blackmail the citizens using morphed images and other abusive practices by recovery agents located in India as well as overseas violating RBI’s Fair Practices Code," MHA said.
‘ORGANISED CYBERCRIME’
The MHA also said that it is an organised cybercrime executed using disposable emails, virtual numbers, mule accounts, shell companies, payment aggregators, API services (account validation, document verification), cloud hosting, crypto currency, etc. Hence, it is advised to involve domain experts during investigation.
“Law Enforcement Agencies can avail the services of National Cyber Crime Forensic Laboratory (NCFL), one of the verticals of Indian Cyber Crime Coordination Center (I4C), CIS Division for technical assistance on loan app analysis, malware analysis and crypto transaction tracing. Authorities can email on [email protected] for the same," the MHA said.
“All States/UTs have been requested to take strict legal action in this regard. Further, all States/UTs are also requested to spread mass awareness in all Districts against the risks of using such apps."
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