Google has removed 30 illegal instant loan apps from the Play Store after reports of people getting cheated by such products that ostensibly had a Chinese connection.
Google has finally cracked a whip on instant loan apps that according to the social media giant were found to be violating its safety policies. It has now removed 30 such applications from the Play Store after reviewing hundreds of personal apps that were reported by both users and the agencies.
These apps have been found targeting vulnerable borrowers with short term loans at exorbitant rates. The tenure of these loans at times would be even less than seven days and were known to resort to extreme measures to recover money in case one defaulted.
These digital lending applications, downloaded with over several million downloads, were also found to be charging steep processing fees as high as Rs. 2000 for loans that were less than Rs. 10000 and had repayment tenure of less than or equal to 30 days. The repayment tenure was found to be as low as a week.
The real scam
The pandemic-outbreak impacted lives like nothing ever has and with income sources dwindling, people reposted to these quick lending applications that processed unsecured loans instantly. Since the entire process of loan application hardly took a few minutes with bare minimum requirements like a users’ Aadhar number, PAN card number and access to contacts and messages etc. these easily became the go-to solution for people who needed money quickly.
These applications were not only found to be charging exorbitant interest rated to the tune of 25—36% PA, but they were also found to be charging an atrocious processing fee.
Additionally, these apps were found to be hiding the actual terms and conditions at the time of disbursement of the loan. Clear information around high-interest rates, processing fees, GST and other vital information was found to be missing from various applications.
In case a user defaulted on the payments, the recovery agents were reportedly found threatening users and were also found to be reaching out to all the contacts from the users’ contact list. This again is against the RBI policies that prohibit the collection agents from harassing borrowers by “persistently bothering” them, or by contacting their family or acquaintances.
The Chinese connection
Agencies started investigating these applications when several people die by committing suicide after defaulting into payments and falling into debt traps. It was then identified that some of these digital quick lending applications had a Chinese connection well.
According to reports applications like Krazy bean, Krazy rupee, cash plush, Rupee pro, Gold bowl, first cash, real rupee/rupee bear, rupee most, first cash, credit rupee, cool cash, money now, pocket rupee, rupee day, cash goo, cash star, cash bowl, cash just, cool rupee, money rupee, gold rupee, money helper, R cash and Money bell apps were run by Chinese nationals four companies – Aglow Technologies Pvt. Ltd., Liufang Technologies Pvt. Ltd., Nabloom Technologies Pvt., Ltd., and Pinprint Technologies Pvt. Ltd.
Preliminary probes suggest that approximately 1.4 crore transactions worth around Rs 21,000 crore have taken place so far from these apps and the money has been siphoned off to China.
A quick search on the Play Store reveals that hundreds of such applications are active. Some of the other applications that are involved in quick loans are Loan Gram, Cash Train, Cash Bus, AAA Cash, Super Cash, Mint Cash, Happy Cash, Loan Card, Repay One, Money Box, Monkey box, Rupee Day, Cash Goo, Cash Star, Real Rupee, First Cash, Krazy Bean, Krazy Rupees, Cashplus, Rupee Pro, Gold Bowl, Monkey Box, Past Credit app, Cool Cash, Money Now, Pocket Rupee, Happy Cash, Loan Card and Repay One.
While RBI, Agencies and Google are investigating at their respective ends, it is clear that these applications have thrived because of inadequate and unclear policies around short-term loans. Even Android Play Stores relaxed policies around new applications have resulted in these scammy applications mushrooming all across.