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Chinese scamsters causing chaos in India through loan app schemes: Cyber pro

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TLDR:

Chinese criminal syndicates operating loan app scams are expected to continue causing financial losses in India, according to cybersecurity law expert Pavan Duggal. These loan apps, which offer instant loans with high interest rates, target unemployed youth and financially stressed individuals, exacerbating their financial distress. The syndicates behind these scams are predominantly based in China and use local recruits in neighboring countries to carry out their criminal activities, including data collection and financial disruptions. Duggal urges the Indian government to implement dedicated cybercrime courts and new legal frameworks to address the misuse of emerging technologies for criminal purposes.


Chinese criminal syndicates are predicted to further damage the Indian economy through loan app scams, according to cybersecurity law expert Pavan Duggal. These scams involve Chinese loan apps that offer instant loans with high-interest rates and exploit unemployed youth and financially stressed individuals in India. The masterminds behind these operations are primarily based in China and use local recruits in neighboring countries to conduct their criminal activities, such as data collection and financial disruptions targeting the Indian economy. Duggal states that China aims to destabilize the Indian economy and gather data through these loan apps. He calls for dedicated cybercrime courts and new legal frameworks to combat cybercrime effectively. Duggal also highlights three crucial issues with current cybercrime laws in India: the lack of a dedicated law specifically addressing cybercrime, incomplete coverage of certain cybercrimes under existing laws, and the inadequacy of existing laws to respond to cybercrimes.

Last year, the Enforcement Directorate froze Rs 106 crore in merchant IDs and bank accounts related to Chinese loan apps. Investigations conducted by the ED revealed the modus operandi of these entities, which involved appointing dummy directors on behalf of Chinese nationals, obtaining KYC documents of company staff, and opening bank accounts without their knowledge or consent. These entities provided short-term loans to the public through loan apps and charged high processing fees and exorbitant rates of interest. They subsequently threatened and harassed borrowers and their family members for repayment. The Chinese-controlled entities also engaged in money laundering activities through various payment gateways and bank accounts.

Duggal notes that the COVID-19 pandemic has marked the beginning of a golden age of cybercrime, and India is not fully prepared to handle the surge in cybercrime. Cybercriminals are leveraging emerging technologies like artificial intelligence and tools such as ChatGPT for their malicious activities. Duggal urges the Indian government to introduce stringent laws to deal with individuals in the country who collaborate with Chinese loan app fraudsters.


Key Points:

  • Chinese syndicates operating loan app scams are expected to continue causing financial losses in India.
  • These loan apps exploit unemployed youth and financially stressed individuals through high-interest instant loans.
  • The masterminds behind these scams are predominantly based in China and use local recruits in neighboring countries.
  • The scams involve data collection and financial disruptions targeting the Indian economy.
  • Experts are urging the Indian government to implement dedicated cybercrime courts and new legal frameworks to combat cybercrime effectively.
  • Current cybercrime laws in India suffer from various shortcomings, including the lack of a dedicated law specifically addressing cybercrime.
  • Last year, the Enforcement Directorate froze Rs 106 crore in merchant IDs and bank accounts related to Chinese loan apps.
  • The entities behind these apps engaged in money laundering activities through various payment gateways and bank accounts.
  • The COVID-19 pandemic has led to a surge in cybercrime, and India is not fully prepared to handle it.
  • Cybercriminals are leveraging emerging technologies like artificial intelligence for their malicious activities.
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