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Why Chinese Loan Apps Came Under The Government's Radar And How To Avoid Getting Cheated By Them?

Chinese loan apps have been in the news for some time. Understand why they are getting banned & how you can avoid getting duped

<div class="paragraphs"><p>Source: Tech Daily on Unsplash&nbsp;</p></div>
Source: Tech Daily on Unsplash 

Over the past few weeks, there have been dozens of Chinese loan apps that have been facing legal trouble with the Indian government. As per reports, the police have raided multiple offices of these Chinese loans across many cities in India. Moreover, the Enforcement Directorate  (ED) also reportedly raided the offices of multiple payment getaways like PayTm and Razorpay and in Bengaluru due to their links to these aforementioned Chinese loan apps. What exactly are these Chinese loan apps in trouble for? Let’s try and understand.

Chinese loan apps and certain payment getaways had been on the ED’s radar since the Covid-19 pandemic started. Dozens of loan apps that were of Chinese origin had started luring users to take short-term loans with attractive advertisements on various social media platforms. Many of these apps would charge exorbitant interest rates to the people who took loans and often used coercive methods to recover the loans plus interest.

Why The Ban Took Place?

Some of these Chinese loan apps would often target the elderly and youngsters and rural folks, who were easy targets for these apps to provide loans. Most people taking these loans did not really understand the terms and conditions of the loans they were getting and were unaware of how extremely high the interest rates were. Moreover, these Chinese loan app companies would use illegal and predatory practices to recover loans from these victims. These apps would use the user’s personal data, photos and contacts to blackmail them and force them to pay up. Representatives from these loan apps would call up the contacts of the people who’d taken loans and threaten them with violence.  As per reports, many of the victims committed suicide under the pressure of financial stress and threats. Hundreds of FIRs were filed against these Chinese loan apps by the victims and affected users. As a result, the ED, the government and the RBI cracked hard on these Chinese apps, raiding their offices, and freezing their accounts.

Chinese Loans Apps Banned In India

The following are just a few of the many Chinese loan apps that have been banned in India:

  • Raise Cash app 

  • Cash Ray app 

  • Mobipocket app 

  • Infinity Cash app 

  • Kredit Mango app 

  • CB Loan app 

  • Cash Tree app 

  • Minute Cash app 

  • Cash Light app

  • HDB Loan App 

How To Protect Yourself Against These Predatory Apps?

While a large number of these Chinese loan apps that operate with shady practices have already been banned, a large number of smaller and lesser-known apps have cropped up to take their place. Fortunately, there are a few basic steps that you can follow to avoid getting scammed by these kinds of illegal loan apps.

  • Do not download any unknown apps on your phone that offer fast loan services or quick credit, unless they are from reputed banks that are registered and approved with the RBI. 

  • If you receive any SMS about getting quick loans or approved loans in your name, delete the message and block the number. More importantly, do not click on any links or URLs present in the message. 

  • If you receive any emails from well-known banks or financial institutions regarding loans or quick credit, carefully examine the exact email address from which you received the mail. If you’re unsure about the origins of the email, delete it and block the email address. If you want to verify the authenticity of the information in the mail, you should check out the bank’s/financial institution’s official website or reach out to their legitimate representatives. 

  • Never share your OTP, passwords or sensitive personal information online with anyone, especially the apps that promise quick loans. 

  • Whenever you are making online purchases, always double-check that you are on the right shopping platform and not on a replicated similar-looking website. 

  • Do not download any applications from any unknown sources outside of the Google Playstore for Android and the Appstore for Apple devices. 

  • Most importantly, check the permissions that any new app on your phone requires. If apps are requesting access to sensitive personal information such as email, photos, contacts, etc, consider revoking these permissions or not granting them at all.