Thiruvananthapuram: Loan app fraud cases in the district are increasingly exposing victims to a cycle of high-interest debt and organised harassment, with police flagging the growing misuse of unregulated digital lending platforms. Data accessed from police sources show that only around 25% of complaints are converted into FIRs, raising concerns over underreporting and gaps in enforcement.Around 320 complaints were reported in recent months, with approximately 120 within city limits and 200 in rural areas, but only around 80 cases were registered. Officials said most cases originate from rural regions, with nearly 80% of victims being homemakers and elderly men, highlighting the vulnerability of those with limited access to formal credit systems. Unlike legitimate applications available on official app stores, many of these loan apps are circulated through links shared on social media platforms. Once installed, they gain access to users’ photo galleries and contact lists without their knowledge, which is later used to threaten and coerce victims, including contacting their relatives and acquaintances. “People who don’t have access to formal credit often turn to these apps. In most cases, loans range from Rs 15,000 to Rs 1 lakh. However, many charge interest rates exceeding 40%, along with processing fees of around 10% deducted upfront, significantly reducing the amount received by borrowers,” a police officer with the special branch said. Police said victims often repay the principal amount but get trapped in a cycle of mounting interest payments. Even after full repayment, harassment continues under the pretext of additional interest, pushing many into severe financial and psychological distress. In several cases, fraudsters allegedly deploy locally hired agents to recover money through intimidation. These agents are typically paid Rs 10,000 to Rs 15,000 to recover amounts running up to Rs 80,000, officials said. Investigators added that many of the key operators behind such apps are based outside the state, making it difficult to trace and prosecute them. Police also noted that only a fraction of victims come forward to file complaints, with many cases surfacing only after extreme distress. Officials stressed the need for greater public awareness and early reporting to prevent victims from falling deeper into the cycle of exploitation. Even when such apps are identified and blocked, enforcement remains a challenge as fraudsters quickly shift to alternative communication channels. Victims are often contacted through platforms like WhatsApp, Facebook and Instagram, allowing the network to continue operating despite regulatory action. “Cases are comparatively higher in rural areas due to a lack of awareness. Awareness and education are the only effective ways to reduce such incidents, as it is not possible to completely regulate online platforms,” a senior police officer said.
