Loan companies using data from apps to threaten defaulters: Report

With consumers increasingly shifting towards digital due to the novel coronavirus, or COVID-19, loan recovery agents have now devised a new tactic. Loan companies are resorting to using phone data of borrowers by tracking them through apps used to apply for the loan. After which, loan recovery agents threaten defaulters, saying they would send personal pictures to all their contacts, Mid-Day reported.  

Only a few borrowers approach the police regarding the issue, while others do not fearing that their phones would be taken by the cops, the report said.

Speaking to Mid-Day, Ishaan Vandoor, a resident of Chira Bazaar at Marine Lines, Mumbai, said after defaulting on a Rs 25,000 loan from Creditt on April 22, his family friends, colleagues, wife, mother, and several others were contacted by recovery agents, who defamed him.

"I had borrowed the money for a medical emergency. I had sincerely requested the recovery agents to give me some time as I suffered pay cuts during the lockdown," said Vandoor adding that over 60 people from his contacts were reached out and that he was threatened by saying there will be Whatsapp group formed to defame him there.  Vandoor did not reach out to the police, as he wanted to be rid of the agents, the report said.

According to Govind Ray a cybercrime consultant, his phonebook is accessed by the app during the time of registration. In some cases, the loan recovery agents will send parts of the phonebook or all of it to threaten clients, Ray said, adding that trading of data through these illicit means has remained a problem for the last 10 years and there is a possibility that it is being used for unlawful purposes.

Since this case involves malicious activity and offenses in the cyberspace, it would also involve penal provisions of the Information Technology Act, 2000 for unauthorised access and breach of privacy, the report said.