5 arrested over e-loan frauds in Dhaka

The Cyber and Special Crime Division of the Dhaka Metropolitan Police on Thursday arrested five members of a fraud gang for their alleged involvement in illegal moneylending through unauthorised apps, under the pretext of microfinancing with high interest rates.

The arrestees are Emanuel Edward Gomez, Arifuzzaman, Shahinur Alam alias Rajib, Shubh Gomez and Md Akram. One car, nine mobile phone sets, nine SIM cards, four laptops and four cheque books of different banks were seized from their possession.

At a briefing at DMP media centre on Thursday, Additional Commissioner AKM Hafeez Akhter said that detectives arrested the five from Dhaka’s Dhanmondi, Banani and Mirpur areas on October 5 and 6.

The arrests were made following a case filed with Dhanmondi police station by a victim under the Digital Security Act, he added.

He said the Detective Cyber and the Special Crime Division of DMP has been investigating the case.

“The arrestees cheated their clients by using personal unauthorised loan apps like Cashman, Tkala, Personal Loans Online, RapidCash, AmarCash, Cashkash and CashCash,” Hafeez Akhter said.

Using these apps, the arrestees used to collect customers’ personal information, capture photos and videos, read mobile contacts, find the exact location of the mobile, and change the phone’s status and data.

Besides, the arrestees operated financial institutions called Thunder Light Technology Ltd, New Vision Fintech Ltd and Basic Development Society without government approval, he added.

“The servers of all these apps are located in China, which were used to attract customers through flashy advertisements for providing low-interest loans without collateral.”

They mainly targeted low-income, unemployed people and students in financial crisis.

Earlier, law enforcement agencies found out that a number of illegal mobile application-based “virtual banks” are preying on the vulnerable and cash-strapped desperate people, offering them shady financial services in exchange for exorbitant fees during the coronavirus crisis.

These illegal apps offer instant loans, remittance, p2p payments, fund transfers, bill payments, and even issue prepaid and debit cards. People from the lower middle-class tier and the young, who are financially vulnerable, constitute the majority of these “virtual banks” clients.

But these lenders impose various hidden charges and high interest on their clients. These app-based lenders attract clients with tacky advertisements and graphical presentations on YouTube and other social media platforms.

For instance, “RapidCash” offers instant loan of up to Tk10,000 without any collateral and guarantor, unlike conventional banks.

For an emergency loan, one has to register with the lender through the mobile app by submitting his or her personal information, work details, emergency contact and a photo of the national identity card.

If the lender, who remains out of sight throughout the entire process, deems the applicant eligible, the loan is promptly provided.

According to RapidCash, it charges service fee for data analysis and application processing and also collects microfinance interest fees “as per government guidelines.”

Apart from RapidCash, a number of mobile app-based lenders, including Cashman, ShopUpeLoan, mCash and CashCash, are offering emergency loans of up to Tk30,000 without any collateral.

None of these lenders has obtained licence from the central bank for operation.

Another mobile app-based virtual entity, pahela.money, claims to be an “online banking platform” but has neither the central bank’s authorisation nor any physical branch.

It launched operation in Bangladesh in March this year offering banking services such as remittance, p2p payments, fund transfers, bill payments, and even issuing prepaid and debit cards.