Harassed by instant loan applications, the defaulter ends his life; Police ask Google to remove ‘illegal’ apps

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Non-repayment of loan borrowed from app-based instant loan finance companies and their repeated recovery calls are forcing customers to end their lives.

On Saturday December 2, G. Chandra Mohan (36), a private warehouse supervisor, committed suicide at his home in Gundla Pochamma village in Medchal-Malkajgiri district, about 30 km from Hyderabad. This is the fifth such ‘suicide’ incident due to harassment by these companies existing only as mobile apps, reported The Hindu.

Cyberabad Police Commissioner VC Sajjanar said the victim borrowed an amount from a loan company a few days ago and was supposed to repay it before the one week deadline. It had borrowed from various other unauthorized apps available on Google Playstore.

“He took around ₹70,000 from at least nine such applications and failed to repay. As a result, lenders labeled him a defaulter and started calling him on the phone and threatening him with many times,” he said.

According to the police, these companies also called and even sent messages to his relatives and friends to defame him, forcing Chandra Mohan to take the extreme step.

Telangana police have identified at least 30 people linked to around 180 “unauthorized” instant loan apps, including four Chinese nationals. The 30 people were arrested at police stations in Hyderabad, Cyberabad, Rachakonda and Warangal. Two sons of a Kurnool police officer are said to have been the driving force behind the launch of some of these applications at the request of Chinese entrepreneurs.

“We have written to Google to remove apps whose operations are illegal,” Sajjanar added.

Shikha Goel, Hyderabad Police Additional Commissioner (Crimes and SIT), said they have identified four companies that operate at least 30 apps with a whopping volume of ₹21,000 crore in more than 1.40 crore transactions. “This is the number given to us by the RazorPay payment gateway, and it is still under investigation,” she said.

She said their business flourished during the lockdown when people ran out of money and searched for loan apps. “The establishment of these businesses almost coincided with the pandemic and we froze about ₹80 crore in 10 bank accounts,” Goel added.

According to Sajjanar, the companies took at least 35% interest and the amount kept increasing until the borrower repaid the amount.

“We are investigating the cases collectively and asking people not to take extreme measures and instead go to the police and file a complaint of harassment and public humiliation,” the commissioner added.

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