App-based loan extortion racket busted in Delhi, Chinese nationals were involved

New Delhi: Delhi Police’s  Intelligence Fusion & Strategic Operations (IFSO) Unit of Special Cell cracked an instant loan-cum-extortion racket, which involved loan scams through phone applications, amounting to over Rs 500 crore. In the operation, that went on for over two months, 22 people from different parts of the country have been arrested by Delhi police’s special cell. The investigation began after Delhi Police received hundreds of complaints on its NCRP Portal about instant loan applications disbursing loans at higher rates and extorting money using morphed nude pics even after payment of the loan. During the primary probe, police found that more than 100 such applications were involved in the racket.

According to PTI, The gang operated at the behest of Chinese nationals and the extorted money was being routed to that country through hawala and cryptocurrencies. The apps involved were seeking malicious permissions from users. After obtaining access to the users' contacts, chats, messages and images, the gang used to upload sensitive information to servers based in China and Hong Kong, a senior police officer said.

The agency also found out that the money was being routed to China through Hawala and cryptocurrencies. The apps were being hosted from AWS server and Ali Baba servers hosted in India but do not comply with being American Companies, Special Cell press statement said.

These apps are hosted on Google Play Store, websites and in advertisements, as well as are marketed using search engine optimization features of Google. Those in need of small loan amounts are lured and a small KYC is used to gain access. A loan is disbursed to the user within minutes while the app uploads user data on the servers in China and other parts.

Shockingly, the network was spread across Delhi, Karnataka, Maharashtra, Uttar Pradesh and other states. After the crackdown, the operatives have been shifting their recovery call centres to Pakistan, Nepal and Bangladesh. So far, more than Rs 500 crore has been siphoned off by the Chinese nationals, police added.

How did the scam work?

As per PTI, the applications were developed in the garb of providing small amounts of loans. The user would download one of such applications, grant permissions to the app and the loan money used get credited to his account within minutes, the officer said.

The users would then begin receiving calls from different numbers that were procured on fake IDs, who would extort money threatening that their morphed nude pictures would be uploaded on the internet if they failed to heed to the demand, Deputy Commissioner of Police (IFSO) KPS Malhotra said.