Probe, take action against Chinese loan apps, MHA tells states and UTs | India News – Times of India

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NEW DELHI: Drawing “urgent attention” of all states and Union territories to illegal and unregulated predatory loan apps, mostly controlled by Chinese entities, that have driven many Indians to suicide by subjecting them to harassment, blackmail, theft of confidential personal data and harsh recovery practices, the home ministry last week asked their law enforcement agencies to engage domain experts to investigate such complaints.
“Large number of complaints have been reported across India pertaining to illegal digital lending apps that provide short-term loan or micro credits at exorbitant interest rates with processing or hidden charges, especially to vulnerable and low-income people and use the borrower’s confidential personal data like contacts, location, photos/videos for blackmail/harassment. Harsh recovery practices followed by these illegal lending apps have claimed many lives across India. This issue has caused serious impact on national security, economy and citizen safety,” stated the home ministry’s communication sent on October 28 to all state chief secretaries and UT administrators.
A couple of months ago, Congress had raised the issue of several Chinese apps having siphoned off around Rs 500 crore by duping lakhs of Indians with debt traps.
It had alleged that an investigation between January and February 2021 had found over 1,100 digital loan apps available online in India.
Claiming a 12 times jump in loans on digital platforms between 2017 and 2020 and occurrence of 52 suicides due to blackmailing by these loan apps, Congress sought to know what the Narendra Modi government was doing to curb these practices.
The home ministry, in its letter, acknowledged having learnt that these predatory lending apps “that may not be regulated entities by RBI” are using bulk SMS, digital advertisement, chat messengers and mobile app stores on a massive scale.
The borrower has to provide mandatory access to contacts, location, phone storage in order to avail a loan. This data is misused to harass and blackmail the citizens using morphed images and other abusive practices by recovery agents located in India as well as overseas, violating the RBI’s fair practices code.
The MHA further noted that such illegal practices by Chinese-controlled apps were an organised cyber crime, executed using disposable emails, virtual numbers, mule accounts, shell companies, payment aggregators, API services (account validation, document verification), cloud hosting, cryptocurrency etc.
Hence, domain experts should be involved in investigation of such mobile apps, it said.
The ministry asked law enforcement agencies to avail the services of the National Cyber Crime Forensic Laboratory (NCFL), one of the verticals of Indian Cyber Crime Coordination Center (14C), for technical assistance on loan app analysis, malware analysis and crypto transaction tracing.
“All states/UTs are requested to take strict legal action in this regard… (and) also spread mass awareness in all districts against the risks of using such apps,” said the MHA letter.

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