MENACE OF ONLINE APP SCAMS IN DIGITAL LANDSCAPE: A REALITY CHECK

A 22-year-old student in Bengaluru allegLedly ended his life at his house in HMT Layout, Jalahalli, in 2023 after being harassed by a loan app company.

- DR.S.KRISHNAN AND RAJVARDHAN SINHA

Tejash Nayar, a 6th-semester engineering student, had reportedly borrowed 46,000 using a loan app. When he was unable to repay the loan, the company executives allegedly harassed him. Unable to bear the harassment, he ended his life, after leaving behind a note apologising to his parents.

In another case, Shivani Rawat, a 23-year-old college receptionist in Delhi, faced her own ordeal. In June 2023, she applied for a 4,000 Rupees ($48) loan through an app called "Kreditbe", since her salary was delayed. Her loan request remained pending, with no funds received. Yet, within a week, she began receiving 10-15 calls demanding 9,000 Rupees ($108) for repayment. Kreditbe's name is a rip-off of a legitimate loan app called KreditBee, a common modus operandi for these illegal loan apps which often choose names similar to reputable brands to create a sense of authenticity.

In both above mentioned cases, Nayar and Rawat had borrowed money from lending apps, which offer loans to users in a convenient, few clicks and without the extensive documentation that a traditional bank loan requires. The money is credited to the borrower's account within a few minutes, unlike the five to seven days that a bank loan takes for borrowers who meet the high eligibility bar.

These online apps lend small sums to people, charge high interest rates and often resort to torture and incessant mental harassment to make the borrowers pay up. The proliferation of fraudulent loan apps on social media platforms poses a significant risk to borrowers, with instances of outrageous interest rates and mental harassment on the rise. Despite the rapid growth in digital lending, a regulatory vacuum allows scam apps to thrive, exploiting unsuspecting users.

COMMON TYPES OF ONLINE APP SCAMS