Have you ever taken a moment to stop and reflect how differently most of us operate now? Think about it – ten years ago, if you wanted anything at all, be it food, medicines, etc., you would have to step out of you house to get it. Fast forward to the Covid – 19 segment of all our lives, this saw a boon in online services, to the present – where literally everything is just a click away. Whether its food to medical services, and now even loans. Yes, you read that correctly. Everything is just a click away.
India has seen rapid growth in the financial and technology sector. This has given rise to various digital lending application being made available on various smart phone devices. Another question that may probably pop up in one’s mind is what has given rise to the growth and demand for digital lending? While there are several factors that have promoted the growth of digital lending, certain key aspects that have actively contributed to this has been the increased need for credit and the increase in smartphone users.
There have been several reports and newspaper publications over the years that have highlighted the traction and popularity of such digital lending applications, while also highlighting the dangers of such applications. These unauthorised digital lending applications use various intermediaries to promote the “lending services” that they offer. Many users on such platforms are unaware that these are not authorised creditor lenders by the RBI, but are, in most cases, unauthorised individuals of foreign nationality who employ Indians to carry out such “lending services”.
These unauthorised credit lenders, promote their “lending services” by saying ‘instant loan credited to your account’ or ‘easy repayment’ or ‘collateral free’, and most people get lured by such terms as going to a bank and trying to avail of a loan, especially if you do not have a sound credit score, is not the easiest or most pleasant task. Little do they know of the dangers the lurk behind such claims.
Various national newspapers have also reported numerous instances where such unauthorised digital lending applications, have impersonated authorised digital lending entities, and have in turn blackmailed and harassed users and borrowers who have downloaded and signed up on the application. For example, a family in Bhopal committed suicide, since the head of the household, who had taken out a loan on one of these applications, was unable to pay the amount back due to the exorbitant interest rates that were being imposed by the unauthorised credit lender. Coupled with the incessant threats that were being received by the family by the recovery agents. A similar incident was also reported in Bangalore, where a 23 year old, who had availed of certain loans from these applications, was unable to pay the amount back. This led to him being constantly harassed by the recovery agents who would threaten to expose explicit photos of him to his family members. Bogged down with debt and the shame associated with it, the 23 year old decided to end his life.
The above are just a few incidents that have taken place over the past year or so. The BBC in a report had also mentioned that over 60 people, between 2022-2023, had committed suicide due to such harassment. Shocking, isn’t it? Most of us may also be aware of the various other cyber crimes taking place. Whether it be in the form of a FedEx call stating that illegal substances have been found in a parcel with the receiver’s name on it or the most infamous one – earn upto Rs. 1,00,000/- a day at the comfort of your home. Part time work at your convenience.
Whether we like it or not, the internet and the rapid digitisation that we are part of is here to stay. What would be helpful is for us to always take a moment to pause and evaluate the situation we are in before we act. Some important points to keep in mind while downloading and availing of loans on these applications are as follows;
- Check to see if the credit lender is authorised and recognised by the RBI – this is a very important first step in ensuring that you are not a victim to these debt traps. The RBI has a list of authorised lenders and a list of cancelled lenders on its website, which is updated periodically.
- Loan Agreement – if you download an application and you get a pop up that says “Terms and Conditions”, please read through it carefully before accepting such terms and conditions. In most cases, while availing of a credit facility, such authorised entities, in most cases, will send you a loan agreement which will have the terms and conditions of the credit being given to you in detail. With the most important ones being – interest rate and the time period for the repayment of the loan amount.
- Do not give access to phone contacts, gallery / photos, etc. – If you download a loan application, and if the application asks for access to your phone contacts or your pictures, please delete the application immediately. In most cases, this is used to blackmail you and extort money from you by threating to expose explicit / morphed pictures of you to friends, family, colleagues, etc.
- Collection of KYC documents – before a loan is sanctioned, authorised credit agents, will ask and collect from you documents such as you PAN card, Aadhard card, etc. If a loan application does not ask for your KYC documents, in a legal and legitimate manner, this would most certainly be a cause for concern, and one should proceed with caution.
Even after carrying out ones own due diligence, on may fall prey to such cyber crimes. What should you do in such a situation? Immediately approach your jurisdictional police, mostly the cyber cell, and file an FIR while also producing the necessary evidence to the police. Further, must also lodge a complaint on the national cyber crime reporting portal. Most importantly, do not panic. Even after filing an FIR if one still gets calls, threats, etc., from these loan recovery agents, the same must be informed the investigation agency to help in the investigation process.