Now, users are conning fraud loan apps: Here's how

In what can be described as another ‘messers become the messees’ scenario, the fraudulent loan apps that have sprouted in recent times and are thriving across various social media platforms are being put in the ‘victim’ spot. These online apps lend small sums to people, charge high interest rates and often resort to torture and incessant mental harassment to make the borrowers pay up.

According to a report in The Indian Express, an entire digital ecosystem has shaped up to take on such fraudulent loan-issuing apps. It was also found that borrowers use artificial-intelligence-generated ‘information packs’, which include fake government-issued ID cards (Aadhaar and PAN cards), a text message folder, a contact list and a gallery full of images, to set up their fake profiles on these apps.

What’s interesting is that these ‘information packs’, which help a person maintain a fake digital trail, are being sold for a meagre amount of Rs 300 through the messaging app Telegram.

Apart from the information packs used to create a fake digital trail, another requirement to scam the lending apps is an empty phone where the forged documents (Aadhaar and PAN cards) are loaded.

“All that this job requires is minimal editing skills on platforms like Photoshop and entry-level computer knowledge to create a database of contacts on an Excel sheet and convert it into the vCard (a Virtual Contact File) format so that Android phones can read them,” a person involved with a group that creates fake digital trails told the publication.

The fake digital history is created in such a fool-proof way that the apps are tricked into issuing the loan, which often ranges between Rs 5,000 and Rs 20,000 per week. The repayment of the money is usually sought around the fifth day after the loan is issued. These apps then threaten borrowers with the personal data collected from their phones during the loan application process. Apart from access to borrowers’ contact lists, text messages, call logs and photo galleries, the apps also have access to their Aadhaar and PAN card details. If borrowers default, they are abused and harassed during the recovery process.

“Due to their very nature, most fraud loan apps don’t have a way to ping the Aadhaar registry to check whether the ID provided by a user is authentic,” another person involved with one such Telegram group was quoted as saying.

The person further added that loan apps’ access to a borrower’s contact list serves multiple purposes. The recovery agents can send abusive messages to borrowers' contacts on their failure to pay up. Also, these lists of contacts serve as a database of potential borrowers. Though contact data, most of which are non-working numbers, is purchased in bulk by and may at times have actual numbers that are in use.

However, loan apps are also likely to reject a user’s loan application if they are found using fake documents.