Instant loans now, extortion later: Delhi police shut down app-based scam with Chinese link

Delhi police have put an end to an extortion racket that was going through instant loan applications. Police have uncovered the involvement of a Chinese national in the extortion racket.

Two people, including a Chinese national (left), have been arrested for extortion and fraud through instant loan applications. (Image: India Today)

By Arvind Ojha: Instant loans via mobile phone apps and minimal hassle – this was the trap set by fraudsters who sought to take advantage of people in dire need of money. And so it was that users who only needed Rs 5,000 to Rs 10,000 ended up paying hundreds of thousands of rupees as a result.

Delhi police recently busted an extortion racket that used instant loan applications to disburse charges at higher rates. And even after the loan amount was paid, they continued to extort money using morphed images from users.

In the racketeering, the involvement of a Chinese national was also revealed. So far, 24 people have been arrested in connection with the case, including Chinese.

RACKET MODUS OPERANDI

At first, applications offering instant loans were developed. The apps were malicious because they asked users for permission to access their personal information before they could use the app.

The apps were hosted on Google Play Store, websites and advertisements. The apps also marketed them using Google’s search engine optimization feature.

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Users who needed a small loan amount instantly downloaded these apps and granted permission to the app after a little KYC (download only Aadhar card, PAN card and live photo ).

Once the users completed the above process, the loan was disbursed within minutes to their bank accounts.

And then the scammers started using users’ personal information. The apps, which already had access to all information locked on the phones, started uploading users’ contact lists, chats and pictures to servers hosted in India and abroad.

Customer data was shared with various modules of the gang, such as loan disbursers, debt collectors, image and threat morphers, and mule account holders.

And then customers started getting calls from different numbers (obtained with fake IDs) forcing them to pay more and more. They have also received threats using their altered/obscene images.

Users, intimidated by the threats, started paying the scammers money into different mule accounts. It was noticed that a person who desperately needed a small loan ranging from Rs 5,000 to 10,000 was forced to pay even in lakhs.

POLICE INVESTIGATION INTO THE CASE

The Intelligence Fusion & Strategic Operations (IFSO) unit of the Special Cell had received several complaints alleging that instant loan applications were disbursing loans at higher rates and even after the loans were paid, they were extorting money using transformed nude photos.

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The IFSO became aware of the complaint and began to analyze the complaints to the NCRP. When analyzing the complaints, it was found that more than 100 such apps were involved in loan and extortion racketeering. It was found that all the apps sought to access the user’s personal data. After gaining access to personal data such as contacts, chats, messages and pictures of the user, these were uploaded to the servers in India and abroad.

Bearing in mind the sensitivity of the problem, the IFSO has started to take action against such apps. The IFSO had recorded cases on these apps and had previously arrested 22 people involved.

The police investigation revealed that the network extended to Delhi, Karnataka, Maharashtra, Uttar Pradesh, Gujarat and other parts of the country. Previously, 22 people had been arrested in connection with the case. Further investigation into the case led to the arrest of a Chinese national, who is the mastermind of the racketeering, as well as an Indian national.

The police arrested Yu Zhang (52 years old) and Vineet Jhaver (38 years old).

During the raids, three laptops, thirteen cell phones, seven credit/debit cards, two hard drives, four SIM cards and three checkbooks were recovered.

The seized items are being analyzed for further clues. The questioning of the arrested defendants revealed that they were acting at the behest of other Chinese nationals. Analysis of the applications also revealed that some of the applications were downloaded from China. The identities of other Chinese nationals in these cases are being established and efforts are being made to track them down and arrest them.

So far, more than Rs 150 crore has been embezzled through accounts provided by Vineet Jhaver and Yu Zhang. Further investigation is underway and efforts are being made to catch others involved in this syndicate.

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