Context:
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Unauthorised digital lending apps harass consumers which leads to suicide.
Loan Apps:
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Digital apps make intensive use of popular social media platforms like Facebook, Instagram and (now banned) TikTok to aggressively advertise their services, while also engaging in wide-scale email and SMS marketing campaigns.
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These platforms charge excessive rates of interest and additional hidden charges, adopt unacceptable and high-handed recovery methods and misuse agreements to access data on mobile phones of borrowers.
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They offer small loans between Rs 10,000 and Rs 60,000 at exorbitant rates of interests between 60 and 100 per cent without much documentation.
How were the victims affected?
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Apart from levying hefty penalties for failure or delay in repayment of loans, the agents use a combination of coercion, blackmail, and threats.
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Immediately after the due date, a customer will be harassed with dozens of calls.
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Abusive calls will be made to family members.
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They access the contacts of relatives and friends of the customers and send them WhatsApp messages defaming the defaulter.