A widespread cyber fraud network has come under the scanner in Kerala, where illegal loan apps are trapping users, especially students and homemakers, through deceptive tactics and digital exploitation.
Police and cyber experts said these apps promise instant loans with minimal paperwork, but later subject victims to serious financial and psychological harassment. Investigations found that these apps are not linked to any licensed banks or financial institutions and are mainly shared through social media and messaging platforms instead of official app stores.
Once installed, these apps secretly access personal data such as photo galleries, contact lists, and other sensitive information without user consent.
The scam works by offering quick loans, often approved within hours without guarantors or documentation. Loan amounts are usually up to ₹50,000, making them attractive to those in urgent need. However, these apps charge interest rates exceeding 40% along with upfront processing fees of around 10%, deducted before disbursal. As a result, users receive much less than expected. Funds are typically transferred through platforms like Google Pay to appear legitimate.
Authorities estimate losses of nearly ₹70 crore over the past 3 years. While many victims are private employees and homemakers, students now account for around 5% of cases. Officials said students often take loans without informing families, which worsens the situation when repayments become difficult.
Harassment begins when payments are delayed. Fraudsters send threats through calls and messages and then contact friends and relatives using stolen data. In some cases, personal photos are edited into obscene images and used for blackmail, with threats of public circulation.
Under pressure, victims often take new loans to repay old ones, creating a debt cycle. This has led to severe mental stress, anxiety, depression, and in extreme cases, suicidal tendencies.
Experts believe these scams are run by organised networks, possibly operating across regions and even outside India. Despite awareness campaigns, cases continue to rise as fraudsters use changing tactics and encrypted channels to avoid detection. Authorities are now using financial tracking tools and digital forensic analysis to trace those involved.
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