Published by: Ojaswi Gupta

Analysis of the Topic:

Instant Loan App Case is a fraudulent activity or a kind of racket going on in the world through the use of technology and online platforms. It is something where instant loans are offered to the consumers at large through phones at low-interest rates by the people who are not authorized to sell the offer. The fraudsters here create an app that is available both in the Google Play Store for Android users and also for iPhone users. They have not tied up with any banking institution. They just ask the users to upload their details into the app and the loan can be availed.

Once the customers sign up in the app, it starts asking them their very confidential personal details. The most common details are:

• The copy of their Aadhar Card

• The copy of their PAN Card

• Their 3-month bank statement

For fraud to be committed, these 3 details are enough.

Also, sometimes the rate of interest is very high. If a person takes a 5000 loan, only 3850 is credited after cutting the GST and processing fee. The companies which make these apps are from different metropolitan states. In a phase when the coronavirus was spreading and people were in desperate need of money. This app came to the rescue for them and people started to avail themselves loans only to suffer later.

Now, after the app takes the details of the customer and he uploads the documents, the amount of loan he asked for gets credited to his bank account. The phone number of the customer gets viral and tele-callers of 20-30 companies call the customer and start luring them for similar loans. They portray themselves as verified companies. Many customers fall for this trick and end up borrowing huge amounts of money. After the due date, a huge penalty is imposed if they don’t repay the money borrowed. And to pay the first loan, they take a second loan and continue the vicious cycle and get trapped in it.

Cases of Fraud:

The fraud came to light when many of its borrowers committed suicide unable to bear the mental harassment by the recovery agents.

1. A 36-year-old man residing in Hyderabad ended his life unable to bear the harassment and humiliation over non-payment of loans over online apps.

2. At least 5 people, including a software engineer, have ended their lives in Telangana after they were harassed to pay back the loans.

3. A man named Chandra Mohan availed a loan up to 1 lakh from the app in various months. He cleared the main amount but was asked to pay additional charges. Later, he became depressed and ended his life by hanging.

4. P. Sunil of Hyderabad lost his job in the pandemic and also became a father. To fulfill the family condition, he took a loan from these apps but he was unable to repay it. Later, he committed suicide and the police registered an abetment to suicide under these digital applications.

Similarly, in the past two months, many states across the country have reported suicides among those who had failed to repay loans availed digitally, through a mobile application.

Who is committing the fraud?

According to the Department of Police, A Chinese National had been arrested by the Hyderabad police at Delhi Airport in the connection with the fraud. The accused was namely, ZHU WEI who was 27 years old and was head of the department for the company named Aglow Technologies Private Limited, Liufang Ltd, Nabloom Ltd, and other similar instant loan app cases. The police arrested a total of 4 people, including 2 Chinese Nationals in connection with the lending scam.

On investigation with the team, the Additional Commissioner Shikha Goel told that according to the preliminary investigation, the fraud was stated to be of 21000 crores have taken place due to these instant loan app. It was not less than a scam. Ad most of these scams have taken place in the payment gateways. Some of the scams have happened over bitcoins.

The scam came to light when many borrowers started to commit suicide due to the harassment and humiliation given by the lenders. According to the police, more than 72 such applications are lending money online without proper approvals. For them, more than a dozen cases are pending in the court of law.


With this, we come to know, how a man’s compulsion leads to immense fraud in the country. The majority of the victims are educated enough to differentiate between what is wrong and what is right. But they choose to be negligent enough when it comes to money and money related matters. The police have also asked the CEO of Google Play Store to take down these unauthorized applications. And also urged the citizens to be careful enough when they download an app. Though it is free to download, it comes with a lot of problems. Read the reviews and then only download the same.

In the situation of pandemic going on everywhere, it was a desperate time for everyone. People were losing their jobs and had nowhere to go. That’s when this scam took its violent form. Because for people a short-term loan was the basic need of the hour. But that small help became the reason for their harassment and depression.