Loan app scam alert: Hyderabad police caution public over rising harassment, extortion cases

Hyderabad: The Cyber Crime Unit of Hyderabad City Police has issued a public advisory warning citizens against a sharp rise in frauds involving illegal and unregulated loan applications.

Officials said fraudsters are luring victims with promises of “instant loans,” “minimal documentation,” and “loan approval with only Aadhaar,” only to trap them in a cycle of harassment, hidden charges, and extortion.

Deputy Commissioner of Police (Cyber Crimes) V Aravind Babu urged citizens to remain vigilant and avoid downloading unknown or unverified loan apps.

How fraudulent loan apps target victims

Police explained that fraudsters use aggressive online promotions to attract unsuspecting borrowers. The typical modus operandi includes:

1. Attractive advertisements

Fake loan apps are widely promoted through social media platforms, SMS messages, and online ads claiming “instant loan approval,” “only Aadhaar required,” or “minimal document verification.”

2. Encouraging app installation

Victims are persuaded to download unauthorised apps that seek access to contacts, photo galleries, messages, and other sensitive data.

3. Instant disbursal with harsh terms

A small loan amount is credited quickly, often within minutes. However, the repayment period is extremely short—usually around seven days—with exorbitant interest rates and heavy processing fees.

4. Hidden charges and illegal recoveries

Victims later discover inflated repayment amounts due to undisclosed charges. In some cases, additional loans are credited without consent, trapping borrowers in repeated repayments.

5. Threats, defamation and harassment

Police said that when victims fail to repay within the short deadline, fraudsters resort to intimidation tactics such as:

- Calling or messaging the victim’s contacts

- Circulating morphed or defamatory images

- Threatening legal action

- Repeated harassment through multiple phone numbers

These actions often cause severe mental stress, forcing victims to make payments out of fear.

Key safety tips for citizens

The Cyber Crime Unit has issued the following precautions:

- Be wary of “Loan with Only Aadhaar” offers: Genuine banks and NBFCs follow proper KYC and income verification procedures. Instant approvals with minimal documentation are a major red flag.

- Download only authorised apps: Use applications from RBI-authorised banks and trusted NBFCs.

- Check app permissions: Avoid apps that demand access to contacts, photos, or files unnecessarily.

- Protect personal data: Never share Aadhaar, PAN, bank details, OTPs, or UPI PINs with unknown apps or individuals.

- Do not panic under threats: Seek legal assistance instead of yielding to intimidation.

- Preserve evidence: Save chats, transaction records, screenshots, and caller details before deleting the app.

Report fraud immediately

Citizens are advised to report suspected cyber frauds immediately by calling the National Cybercrime Helpline 1930 or filing a complaint at cybercrime.gov.in.

For cyber safety updates, the Hyderabad Cyber Crime Police can be followed on their official social media handles.

The police said that early reporting significantly improves the chances of preventing financial loss and taking swift action against offenders.