Chinese misuse the KYC details in their loan applications
A publicization of a scandal by Chinese loan application, Reports drew a vulnerable misuse of Indian KYC details to set up fake bank and crypto exchange accounts without owners’ authorization.
Shonali, a 48-year-old lecturer, has been through the same scandal where she lent money from a Chinese loan application from September 2020 to meet her financial stress; these applications fulfilled her needs but at a prime interest of 1% daily, trapping customers by providing micro-loans without collateral. In addition, they charge 14-15% of the loan amount as a processing fee.
I used around 25 different fast lending applications. It was a debt trap, and I didn’t realize it, Shonali explains. Only an amount of Rs 2.4 lakhs had been a nightmare for her, shaping a suicidal circumstance even though she paid 7.8 lakhs with interest and answering all threat calls.
Consolidation of the trap was ahead. In December 2020, Shonali lost access to all her accounts. A congratulating notice from Kotak Mahindra Bank and an OTP email from Bitbns, a cryptocurrency exchange for opening a new account, was shocking for her. She adds, “I didn’t have a Kotak bank account, and I did not know what a cryptocurrency exchange was. I also didn’t have access to two of these accounts”.
Vikram, a Chennai resident who uses Chinese fast lending applications, discovered in February 2021 that they had exploited his KYC data to open an SBI bank account to which he did not have access. He’d also got an OTP through email from Bi-nance, a bitcoin exchange.
A group of cybersecurity experts investigating Chinese-operated fast loan and online betting apps has been aiding loan app customers who have been deceived. They recorded five instances of loan defaulters’ KYC data being used to open accounts on crypto exchanges in February 2021; they said.
Exchange accounts by an app in India have launched fake bank and crypto exchange accounts investigations. Many accounts may send money out of India in cryptocurrency, investigators say.
Shonali defaulted on payment in one app and was redirected to other instant loan apps. Four of the 25 apps used by Shonali are under investigation by the Hyderabad police.
“For example, a shell business called Huahuo handled collections for the credit bear lending app. One director worked for Link Yun Technologies, which handled the Dokupay betting app. “This is a large, tiny network engaged in a variety of illegal activities, including betting and digital lending, ” says Balaji Vijayaraghavan, General Secretary of Save them India Foundation.
Telangana, Tamil Nadu, Karnataka, and Delhi police investigated the Chinese-operated quick lending and online betting apps. According to cybersecurity experts, many of these lending and betting applications are still running without repercussions. Seven Chinese nationals and over 35 Indians have been detained so far.
Fake bank account victims have submitted their KYC information with lending applications, including their PAN card, driver’s license, and other papers. As a result, the victims don’t know which of the fast loan applications they used used their personal information to create bank and cryptocurrency exchange accounts.
The bitcoin market in India is still in flux. Experts claim that KYC verification methods on these sites are not standardized. However, there are worries about the sector’s lack of openness.