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Why did Google remove 2,000 loan apps from Play Store in India?

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Mohammad Bilal
Mohammad BilalAug 26, 2022 | 14:32

Why did Google remove 2,000 loan apps from Play Store in India?

Google is in the process of introducing stricter policies for listing the loan offering apps on the Play Store.Photo: Getty Images

Google removed as many as 2,000 loan apps from India Play Store from January to June this year for violating company's policies. Google India took this decision as these credit disbursement apps misrepresented information and had a questionable offline behavior.

Sakesh Mitra, Senior Director and head of trust and safety at Google in the Asia Pacific, said that the tech giant is in the process of introducing stricter policies for listing the loan offering apps on the Play Store, PTI reported. He added that the loan problem has peaked and it will subside given the focus and attention the issue is garnering.

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Why these loan apps are problematic: In India, the menace of loan apps increased after the Covid-19 pandemic, when people lost their jobs and looked for instant loan apps that gives them money. In return, these people not only ended up giving more than what they borrowed but also many became prey to online abuses, threats and mental trauma. 

The scam caught attention for the first time in December 2020 when Hyderabad Police froze 75 bank accounts holding Rs 423 crore in connection to a scam where apps were charging a hefty 35% interest from the victims. This scam was done through 30 loan apps on Play Store and none of them were approved by the Reserve Bank of India (RBI). The businesses operated through call centres in Gurugram and other cities of Haryana.

How they operate: These digital loan sharks operate by first luring the borrower with instant laons and low interest rates but in the process they trap the borrower into a never-ending cycle of loan repayments. For example, when a person borrows the money, the amount credited is way less than what the company had promised. Secondly, when they have to repay the loan, the borrowers come to know that they have to pay nearly double of what they took. For that, he/she takes another loan from another lender and ends up taking a loan running into thousands and sometimes lakhs.

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On the due date, the lending company threatens the debtor with vile abuses and threats. The collection agents even contact the family members and friends of the borrowers and threaten them of consequences if the loan is not repayed. The company for this recovery of loan specifically employs abusive, foul-mouthed people.

The biggest problem is that these scamsters go after the borrower even after that person has paid the full loan. They press for exhorbitant interest rates from these people and for that they harass them.

Google Playstore image. Photo: Getty Images

How do they get access to contacts? While downloading the app, it seeks permission from the user to access his phonebook, call logs and even gallery. The borrower ignorantly clicks on "allow" option. This gives the loan sharks an access to borrowers relatives. To pressurize the debtor into giving what they demand, they harass them.

Incidents of suicides: The process of loan recovery of these lending apps is extremely toxic. They resort to ugly methods which drives people to suicides.

  • In July 2022, a 25-year old colliery employee from Hyderabad threw himself before a speeding train after his nude photos were circulated online with a women. 
  • A 24-year old housewife of Guntur also recorded a chilling video of her misery before hanging herself, the Times of India reported both these cases.
  • In February 2022, a 28-year-old security guard from Hyderabad hanged himself to death after he was harassed by these loan sharks.
  • In April 2022, a 28-year-old from Jiyaguda, Hyderabad, killed himself after he was harassed by these collection agents.
  • In January 2021, at least 6 people in Telangana died by suicide after they were subjected to extreme mental tourture, The Hindu reported.
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There have been several cases of suicides because of these digital loan apps in the past two years. 

How to stay safe from them: The first thing you should do is not to install any loan app which is not approved by the Reserve Bank of India (RBI). If you are installing any app and it asks for permission, never allow that. If the lender asks you to do it, it is perhaps the first sign that there is something wrong with it.

If you already end up in such situation, approach the nearby police station and register an FIR.

Last updated: August 26, 2022 | 14:33
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