How harassment, threats of nude photos by loan apps forced Andhra couple to suicide

Amaravati: After the death of a couple in Rajahmundry who were being harassed and threatened by loan app agents, Chief Minister Y.S Jagan Mohan Reddy has asked officials to take stringent action against unauthorised money lending apps that are harassing people.

A few days ago, K. Durgarao (32) and Ramya Lakshmi (24) from Rajahmundry borrowed around Rs. 50,000 from "Rupee Tiger" and "Handy Loan" apps. While Durga Rao was a delivery executive for Zomato, Ramyalakshmi was doing a tailoring job. When they failed to repay the loan on time, loan recovery agents started harassing them and even threatened to release morphed nude photos of Ramyalakshmi on social media if the money was not returned on time.

Following the incident, Jagan instructed officials to crack down on such illegal loan apps. "Strict action will be taken against any loan lending apps that are unauthorised and not recognised by the RBI," he said.

As per the law, a loan company needs to be either a bank or a non-banking financial company (NBFC) and has to be registered with RBI to be able to lend. They can otherwise have a license as a money lender under the State Money Lenders Acts.

According to an official from the cyber crime department, a majority of the money lending apps are illegal.

Social media a weapon for agents

Loan app agents are targeting people through social media. Instant money loan apps attract borrowers with a downgraded credit score and urge them to take another loan to pay off the first one.

Access to phone data

According to the cyber crime officials, when a mobile app is downloaded on the phone, it asks for access to storage, contacts, camera, and microphone. This allows the apps to access the user's data. Following this, whenever users delay in repaying the loan, the agents start harassing them with constant phone calls and threaten to leak their private information on social media. The police advise people to take loans only from banks and non-banking financial companies recognised by the Reserve Bank of India.

Case study: Biggest fraud in Vizag

A case was reported a week ago in Visakhapatnam which is reportedly the biggest loan app fraud in the state. A man was arrested for allegedly threatening a woman over the repayment of loan.

The accused, R. Jayasimha Reddy from Hyderabad, had connections with Chinese and Hong Kong-based gangs. He was involved in transactions worth Rs. 100 crores through fake firms. In this case, Reddy threatened a woman who applied for a loan of Rs. 5,000. Although she cleared the debt before the deadline, she was threatened and asked to pay Rs. 12,000. The loan agents threatened to circulate morphed photos of her friends and family.

During interrogation, Reddy said he got in touch with gangs from Hong Kong and China. He shared his KYC details with the gang and borrowed loans in the name of fake firms.

According to Visakhapatnam city police commissioner Ch. Srikanth, Reddy had opened 16 bank accounts, including 11 firm accounts, and gave access to loan app organisers. They communicated through Facebook and Telegram.