MHA Flags Surge in Illegal Loan App Threats; Warns Users Against Harassment Tactics

The Ministry of Home Affairs (MHA) has highlighted the government's ongoing efforts to tackle the rising cases of illegal digital loan applications in India. Authorities said that several users across multiple states have fallen victim to apps that operate outside regulatory norms, sometimes accessing personal data and issuing threats to coerce payments.

Major Arrests Highlight Depth of the Problem

In one of the biggest breakthroughs of 2025, Delhi Police arrested chartered accountant Abhishek Agarwal, believed to be the mastermind of a sprawling ₹750-crore fake loan app racket linked to Chinese nationals. The operation ran fraudulent apps such as Inst Loan, Maxi Loan and RupeeGo, stealing victims' personal data-including contacts, photos and messages-and later using it for blackmail.

The gang allegedly threatened victims with morphed photographs and public shaming if they refused to pay inflated "fees". Devices and cash were recovered during the arrest, and investigators say the racket had been active across multiple states since 2022.

Other victims include Sarabjit Singh, a postmaster from Ludhiana, who lost Rs 87,000 in December 2024 after applying for a supposed Rs 2 lakh loan via Flipkart. He was tricked into completing a fake KYC link and made a "token payment" that was deducted by the scammers.

Similarly, in Bengaluru, a woman who downloaded a loan app called Score Climb was targeted despite never applying for a loan. The app allegedly accessed her personal data, including identification documents and contacts, and she received extortionate demands alongside threats to distribute morphed images.

Government and Regulators Step Up Measures

Recognising the seriousness of digital loan fraud, the MHA, RBI, and MeitY have strengthened coordination in the last two years.

A landmark directive in 2024 instructed Google to remove fraudulent loan apps, leading to a large-scale clean-up of the digital marketplace:

2,200+ fake loan apps removed in 2024

2,500 apps suspended between April 2021 - July 2022

Another 2,200 removed between September 2022 - August 2023

Most recently, the government informed Parliament that 87 illegal loan-lending applications have been blocked under Section 69A of the Information Technology Act, 2000, following the prescribed due process. The move underscores MeitY's growing focus on choking cyber-fraud at its source by stopping malicious apps from reaching users.

Cyber Crime Wings Intensify Public Awareness

Police cyber units nationwide continue to issue advisories about high-risk apps such as Prime Lend and Candy Cash, which are used by scammers to harvest contacts, images and SMS data. Victims who delay repayment-even when no genuine loan exists-often face abusive calls, relentless harassment and extortion.

To protect citizens, the MHA has encouraged state cyber cells to run awareness drives outlining how fraudsters operate and how users can stay safe online.

How Users Can Stay Protected

Authorities emphasise that prevention is the strongest defence. Citizens are urged to:

• Download apps only from official app stores or verified bank websites.
• Avail loan facilities only from RBI approved entities only
• Never click on KYC links sent through messages or WhatsApp.
• Avoid sharing OTPs, UPI PINs or passwords-banks will never ask for them.
• Check app permissions; fraudulent apps often demand access to contacts and galleries.
• Enable two-factor authentication and SMS alerts for transactions.
• If threatened or blackmailed, do not pay, block the numbers and preserve evidence.
• Report incidents immediately to the National Cyber Crime Reporting Portal or local police.

The blocking of illegal apps, the arrest of key operators and the removal of thousands of fraudulent applications show that India's cyber-security apparatus is becoming more proactive and better coordinated. Officials say the government's approach-combining technology intervention, regulatory oversight and public awareness-has already prevented numerous potential frauds.

With cybercrime evolving rapidly, the MHA maintains that its efforts will continue, ensuring that digital financial safety remains a top national priority.

Also, to remain alert and aware, MHA advises citizens to follow the official social media handle CYBERDOST on all leading social media platforms.

YouTube - https://youtube.com/@cyberdosti4c

Instagram- https://www.instagram.com/cyberdosti4c?igsh=c2tteTd5Mjl2b2cw

Facebook- https://www.facebook.com/share/1KVuL1aJ9y/?mibextid=wwXIfr X- https://x.com/cyberdost?s=11

Whatsapp- https://whatsapp.com/channel/0029Va3VAOY8fewrOtXqMw1V

Dailyhunt - https://m.dailyhunt.in/profile/I4C_MHA