After crackdown in Nepal, Loan app sharks move to Pakistan

Representational image. Pic/iStock

In recent months, the cyber cell has noticed a resurgence in loan app cases. What's surprising for the police is the shift in origins - previously traced to Nepal, now a majority of these calls originate from Pakistan. Following a series of mid-day reports, the Nepal police successfully dismantled an entire network of illegal call centres.

The cyber cell claims to have tracked several IP addresses associated with these recent loan app cases, raising concerns among law enforcement. There's apprehension about the possibility of Chinese cyber criminals relocating to Pakistan, potentially reviving one of the largest cyber
fraud schemes.

Yasir Shaikh, cyber expert

The local Mumbai police station, already grappling with a surge in like-and-earn fraud cyber cases from Dubai, is now alarmed by the emergence of loan apps from Pakistan. A cyber cell officer said, "While we witnessed a massive spike in cases post-COVID in 2021-2022, the numbers dropped after a crackdown in May 2022. But this year alone, we've registered 54 cases related to loan apps. In 2021, the numbers exceeded a hundred, with many victims not approaching the police, ashamed of borrowing Rs 5,000-10,000."

Officials, concerned about the sudden rise in these cases, have been collaborating with various agencies to curb these apps. They're actively engaging with Google to ban newly surfaced apps, similar to their success in banning around 2000 apps earlier. The rise in these apps on platforms like Instagram, Facebook, and Telegram has prompted intensified efforts.

Agencies are actively engaging with Google to ban newly surfaced apps, similar to their success in banning around 2000 apps earlier. Representation pic

Authorities also noted that calls from Pakistan use Indian nationals' data from the dark net to secure loans from Chinese apps. Some Indians, whose numbers are linked with Aadhar, despite not taking any loans, receive messages and manipulated photos. Pakistani call centres, employing tactics akin to those in Nepal, involve teams providing loans, engaging in WhatsApp conversations, and using morphed photos for recovery. The involvement of the same Chinese nationals from previous cases, now operating from Pakistan, has been observed.

"Loan apps appear to be a safe alternative to traditional lenders, but they have a dark side. These fraudulent apps are now linked to Pakistani IP addresses and Chinese funding, preying on individuals who need quick financial assistance. Once a borrower takes out a loan, they are subjected to exorbitant interest rates, hidden charges, and aggressive collection tactics. Some loan apps even threaten violence or intimidation if borrowers do not repay their debts," said leading cyber expert Yasir Shaikh (CTO and founder of Macksofy Technologies Pvt Ltd).

Lakhmi Gautam, joint commissioner crime, Mumbai police

"The reach of these scams is staggering, with over 1,000 fraudulent loan apps identified in India. These apps have collectively defrauded borrowers of billions of rupees. The government is taking steps to address this issue, but more needs to be done. India must strengthen its cybercrime infrastructure, enhance cooperation with international law enforcement agencies, educate citizens about the dangers of loan apps, and implement robust data protection measures," added Shaikh.

According to Mumbai police data from January to October, 54 loan app cases were registered, with only 11 cases detected and 11 accused arrested. The complexity arises from layers of agents hired by Chinese loan app masterminds, making it challenging to pinpoint the main culprit overseeing Indian operations via handlers in Pakistan.

"Our specialised team is actively handling numerous cyber cases, with a particular emphasis on large-scale operations, such as loan app and task fraud scams. Despite facing various challenges, we've successfully resolved several cases. Citizen awareness remains a crucial factor, and we are dedicatedly working to enhance it," said Lakhmi Gautam, joint commissioner crime, Mumbai police.

The crime branch, in the past three months, has apprehended 75 accused in various cyber fraud cases, including loan app and task fraud, also known as like-and-earn scams.

75
No. of accused arrested by crime branch in last three months