Crime Branch launches investigation into loan applications
The Crime Branch has opened a preliminary investigation into the functioning of increasingly popular mobile phone apps that provide loans and cash advances to subscribers without too much collateral or paperwork.
S. Sreejith, additional police chief, Crime Branch, said The Hindu that the investigation would determine whether such impromptu financing places citizens in exorbitant debt traps, making borrowers vulnerable to intimidation and suicide.
The Crime Branch is also reportedly investigating whether the attractive cellphone-based loan programs were sanctioned by the Reserve Bank of India (RBI).
Mr Sreejith said police had so far not discovered any crime. However, the agency is reportedly investigating whether digital financial transactions broke the law. The BC sought information from police stations in Kerala on crimes related to lending money and unnatural deaths.
State Police Chief (SPC) Loknath Behera had ordered the investigation based on reports that law enforcement in Telengana had dismantled a racket that threatened defaulting borrowers. Police learned from their counterparts that “cell phone loan application” racketeers stole personal information stored on debtors’ cell phones and used the data to blackmail, vilify or harass them into paying them back. their loans.
The suspects also created WhatsApp borrower groups. They used the groups to threaten and shame them into fulfilling their mortgage conditions. Police said women were victims of racketeering in several states. Many borrowers seemed unable to escape the vicious cycle of debt and had attempted suicide. However, Kerala has not reported any such incident to date.
Mr Behera asked CB to get more information about the racketeering from other state law enforcement and Interpol.
He asked the agency to use the High-Tech Cyber Inquiry Cell services to assess the penetration of prepayment and loan services based on mobile phone applications in Kerala.
Another official said offshore investors beyond the law of the land appeared to control operations. However, the police could reserve their local agents if they are found guilty of charging excessive interest or using authoritarian methods to collect loans.
He said the pay cuts and lost wages caused by COVID-19 had forced a significant portion of white-collar workers to seek cash advances. Many could have fallen prey to online racketeers. The CB probe would shed more light on the matter.