Failure to repay the loan borrowed from instant app-based loan finance companies and their repeated recovery calls are forcing customers to eventually end their lives.
On Saturday, December 2, G. Chandra Mohan (36) supervisor of a private warehouse, killed himself at his residence at Gundla Pochamma village in Medchal-Malkajgiri district, about 30 km from Hyderabad. This is the fifth such incident of "suicide" due to harassment by these companies existing only as mobile applications, reported The Hindu.
Cyberabad Commissioner of Police VC Sajjanar said that the victim had borrowed an amount from a loan company a few days ago, and was supposed to repay it before the deadline of one week. He had taken loans from various other unauthorised apps available on Google Playstore.
"He took around ₹70,000 from at least nine such apps and failed to repay. As a result, the lenders branded him a defaulter and began calling him over the phone and threatening him repeatedly," he said.
According to the police, these firms also called up and even sent messages to his relatives and friends to defame him, forcing Chandra Mohan to take the extreme step.
The Telangana police have identified at least 30 people linked to around 180 'unauthorised' instant loan apps, including four Chinese nationals. The 30 people have been arrested from Hyderabad, Cyberabad, Rachakonda and Warangal Commissionerates. Two sons of a police officer in Kurnool were said to be kingpins in floating a few of these apps at the behest of Chinese entrepreneurs.
"We wrote to Google to take down the apps whose operations are illegal," Sajjanar added.
Hyderabad Additional Commissioner of Police (Crimes and SIT) Shikha Goel said they have identified four companies which are operating at least 30 apps with a whopping ₹21,000 crore volume in over 1.40 crore transactions. "This was the number given to us by RazorPay payment gateway, and it is still under investigation," she said.
She said that their business flourished during the lockdown when people ran out of money and looked up to lending apps. "These companies' establishment almost coincided with the pandemic and we have frozen around ₹80 crores in 10 bank accounts," Goel added.
According to Sajjanar, the firms took an interest of at least 35 per cent and the amount kept increasing till the borrower repaid the amount.
"We are investigating the cases collectively and we request people not to take extreme steps and rather approach police and lodge a complaint about the harassment and public shaming," the Commissioner added.