Written by Sarosh Bana.
Overseas “loan mafia” operatives have succeeded in keeping their brutal loan recovery racket alive by staying a step ahead of the Indian investigating agencies.
Ruthlessly hounded borrowers in India had drawn comfort last year when Indian law enforcement authorities could motivate the Nepali police to raid and dismantle the Chinese-Nepali-Indian ring of loan app operators who started out from China in targeting poor loan-seekers in India through fraudulent online loan schemes.
Numbers of Indian borrowers had been driven to suicide and many others humiliated on social media as the China-based mafia hounded them and wiped out their bank savings, before a crackdown by the authorities forced them to move their lucrative network of illegal call centres to Nepal.
Now law enforcement agencies in India are at their wits’ end as the Nepali, and Chinese, cyber criminals are relocating to Pakistan, with calls for “loan recovery” now originating there, potentially reviving one of the largest fraud schemes plaguing Indians.
This resurgence in loan app cases led the Indian police cyber cell to track vast numbers of IP (Internet Protocol) addresses associated with these loan app cases.
“While we witnessed a massive spike in cases post-COVID in 2021-2022, the numbers dropped after a crackdown last May,” a cyber cell officer was quoted as saying. “But since then we have registered 54 cases related to loan apps, while in 2021, the numbers had exceeded a hundred, with many victims not approaching the police, ashamed of borrowing trifling amounts.”
The Indian government has been concerned enough about this surge in cases to intensify efforts to block such fraudulent apps on platforms like Facebook, Instagram and Telegram. It has for instance been engaging with Google to ban such apps, with Finance Minister Nirmala Sitharaman informing Parliament in December that Google has suspended or removed over 2,500 fraudulent loan apps from its Play Store between April 2021 and July 2022. She also said that the government was collaborating with the Reserve Bank of India and other regulators and stakeholders to control these apps. The matter is besides regularly discussed and monitored in the meetings of the Financial Stability and Development Council (FSDC), an inter-regulatory forum under the chairpersonship of the Finance Minister.
Authorities have found that callers from Pakistan have been accessing personal data of Indian nationals from the dark net. Many victims who have not availed of any loans have also been targeted with messages and faked screenshots and photographs. Pakistani call centres have reportedly been employing tactics similar to those of the Nepali fraudsters, in that they have constituted teams that work in round-the-clock shifts, engage in WhatsApp conversations, threaten and intimidate their victims and blackmail them with morphed photos for “recoveries”. Authorities have also ascertained that many of the Chinese scamsters who previously operated out of Nepal now operate from Pakistan.
The reach of these scams has been astounding, with over 1,000 fraudulent loan apps identified in India, collectively defrauding borrowers of billions of Indian rupees. Government measures to tackle this menace are evidently falling short, and many cyber experts feel that there should be greater efforts made to strengthen the country’s infrastructure for combating cybercrime, enhance cooperation with international law enforcement agencies, educate citizens about the dangers of loan apps, and implement robust data protection measures.
The Indian government also needs to somehow sound out the governments of Pakistan, Nepal and China to seek their collaboration on dismantling this international criminal network and recover to the extent possible the money lost by the victims.
The Indian authorities had previously led the Nepali police to launch a series of raids on the illegal call centres operating in the capital city of Kathmandu and which were registered under the Companies Act and frequented by Chinese nationals who came on business visas. Hundreds of Nepalis, mostly young girls and boys fluent in the Indian language of Hindi, had been arrested in these raids, while a number of Chinese and even Indian nationals had been taken into custody.
The youngsters were initially informed they were being recruited for promotional activities, but were then imparted training to be abusive and aggressive “loan recovery agents” and tasked to extort targeted sums of money from the hapless Indian borrowers and blackmail them with morphed pictures if they failed to pay up or were lax in paying up.
The raiding police found the operators using such high technology that they were hardpressed in retrieving the data.
