Loan App Scam: Google removes over 2000 fraud personal loan apps from Play Store

Google has announced that it has purged more than 2000 personal loan applications from the Google Play Store in the January to June period. This announcement comes after various reports suggest that malicious personal loan apps are targeting users in India using fake threats and extorting money. Google claimed to have taken action after consulting with law enforcement agencies.

The Indian govt is also planning to ban 300 such predatory personal loan apps soon. The malicious apps that will be removed are mostly connected to China in some form or other. Many of these apps have also been linked to money laundering.

Saikat Mitra, the Senior Director and Head of Trust and Safety at Google Asia-Pacific, claimed that the blocked apps were targeting Indian users. He also informed that the tech giant will roll out more changes in its Play Store policy to curb the proliferation of such predatory apps. With some changes in place, Google asks personal loan apps in India to complete the additional proof of eligibility requirements.

The eligibility includes copy of their license by the Reserve Bank of India (RBI), and declaration that they are not directly engaged in money lending activities and are only providing a platform to facilitate money lending by registered Non-Banking Financial Companies (NBFCs) or banks to users.

“If you are licensed by the RBI to provide personal loans, you must submit a copy of your license for our review,” the company said in a recent blogpost.

“If you are not directly engaged in money lending activities and are only providing a platform to facilitate money lending by registered Non-Banking Financial Companies (NBFCs) or banks to users, you will need to accurately reflect this in the declaration,” it added.

How the Loan App Scam is being conducted

When a person in need of money downloads one of these personal loan applications, they are allowed to borrow money with minimal background check. Once the apps are downloaded it asks for various permissions which includes access to contact details and even the user’s gallery.

Once the money has been received from the loan app, the user starts getting threatening messages much before the due date of repayment. Since many of these users had given access to their contact list and image gallery, the fraudulent app starts threatening to send objectionable images of the user to his or her contact list. In order to stop that from happening, they start demanding much more money than the agreed amount. The user ends up paying a sum much higher than what they borrowed.

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