First publised on 2020-12-23 07:42:50
Are you being bombarded with numerous SMSes asking you to download an app and get anywhere between Rs 5000 to Rs 50000 in your bank account instantly? People facing small and temporary financial difficulties (and after the pandemic, the lockdown, the job cuts and the salary cuts, there is no dearth of such people) are getting lured by these apps, but reports are now pouring in that some of these fly-by-night operators, who often operate outside the regulatory framework, are making life hell for people who have availed their services. Instant loans were called the game changers in the personal loan space. But some operators are giving the entire sector a bad name.
Some of these apps pose a huge data risk as they will ask you for your identity proof and address proof, generally the PAN and Aadhar details. Since their credentials are not established, there is every chance that user data will be misused. Further, these apps apply severe strong arm tactics to recover their loans even if the EMIs are missed for one day. Apart from loan recovery agents, these apps start hounding you on social media and start calling people on your contact list (this information they acquire when you give several permissions while downloading their app). In short, for a small amount of loan, they start the process of name and shame with a vengeance.
There have been reports of people committing suicide when faced with such a situation. The police have been registering cases of harassment and are looking into how to curb this menace. They have started writing to banks and getting the accounts of such operators frozen. But this is at best a knee-jerk reaction. The police will have to work with regulators to prevent such companies from starting operations if they are not licensed. Google, on the other hand, is trying its best to pull down such rogue apps from the Play Store. For the public, it will be better if they make detailed inquiry about such apps and get their loans, however small, from genuine sources.