The Trap: India’s Deadliest Scam: How predatory loan apps drive the poor to death

These apps, deceptively easy to download and utilise, have ensnared millions of users in a vortex of financial despair, public shaming, and psychological trauma, ultimately pushing as many as 60 people since 2020 to their deaths. It gives us a glimpse of the mechanisms of this malevolent scam, the emotional toll it has taken on its victims, and the social implications of financial exploitation of India’s poor through technology.

The anatomy of a loan app scam

The scheme begins innocuously enough. The promise is simple: an easy, fast loan within instant approval and quick disbursement to cover life’s unexpected costs. No need for lengthy bank procedures, no scrutiny of credit history—just a click and money flows into your account. It sounds like an irresistible solution for millions facing financial hardship. But behind the shiny interface of these apps lies a carefully orchestrated trap designed to exploit the vulnerable.

These loan apps often cater to people without access to traditional banking services or those in urgent need of cash. They operate in a grey area of regulation, taking advantage of lax oversight in digital lending. Once the money is disbursed, the real nightmare begins. Users, often unaware of the steep interest rates and hidden fees, quickly find themselves in a vicious cycle of debt, unable to repay the loan. When they can’t pay, the blackmail begins. And this is where the scam escalates into a full-blown psychological assault. Loan apps access phone contacts and private data, threatening to send shameful, falsified messages to family and friends unless the debt is repaid.

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Early on in the documentary, we meet victims like Bhoomi Sinhaa, a Mumbai homemaker and respected property lawyer, who went through hell and contemplated suicide, but survived because of her daughter and vigilant relatives. When Bhoomi couldn’t make the repayments, her phone was flooded with abusive message, and her nude morphed photo was sent to all her contacts, including her daughter, Astha.

In Telangana, the parents of a 24-year-old woman, Monica, were devastated when their daughter committed suicide. Monica had been relentlessly harassed by loan app recovery agents. For her, and others like her, there was no escape from the mounting pressure. Gauri, a young woman in Pune, murdered her grandmother, desperate to steal the elderly woman’s jewellry in a futile attempt to pay off her debts. These are just some of the tragic stories that The Trap exposes, shining a searing light on a scam that preys upon ordinary people.

Breaking the borrower emotionally

The tactic of public shaming and blackmail is designed to break the borrower emotionally. The humiliation is compounded by the fact that it’s not just the borrower who suffers, but their entire social circle is dragged into the ordeal. The intense psychological pressure can quickly spiral out of control, especially in a country where public shame and honour are deeply intertwined. The focus of the documentary is Parshuram Takve from Maharashtra, who has a few criminal cases against him. Married to a Chinese, Liang Tiang Tiang, and director of four such shady businesses, he was charged with extortion in April 2022, but remains on the run.

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Behind Takve, however, lies a sprawling web of companies, some bearing legitimate names but employing the same modus operandi. Tiang Tiang is listed as a director of Jialiang Infotech, a firm that profits from loan recovery, often using illegal tactics. Behind this company, investigators discovered two Chinese firms — Epoch Go Credit and Ajaya Solutions — whose money trail led all the way to a mysterious Hong Kong-based businessman, Li Xiang. Xiang, despite having no visible online presence, is believed to be a key player profiting from the misery of the poor.

Agarwal’s investigative approach is methodical and fearless. She gets a lead in the case when she stumbles upon an insider, Rohan (name changed), who worked at one of the call centres tasked with recovery. Going undercover, Rohan manages to get footage of hordes of men and women caught threatening and abusing on calls. The documentary shows how these apps — part of an international network, they exist not just in Asia, but also in Africa and Latin America — are supported by an untraceable network of businesses, and operate with impunity, with their operators shielded by legal loopholes and jurisdictions spread across continents.

The silence of the companies

An award-winning investigative journalist with over two decades of experience, Agarwal has consistently taken on powerful forces, from political corruption to corporate malfeasance; she is also known for exposing the Electoral Bonds scheme — another complex web of corruption. In The Trap, she highlights how, despite the rising toll, the companies implicated in these crimes remain largely silent. Numerous companies refused to comment or denied involvement in abusive practices. Asan Loan, Callflex Corporation, and Parshuram Takve — all named in the documentary — refused to respond to the BBC’s inquiries. Others, like Majesty Legal Services and PaySense, issued statements claiming adherence to “the highest standards” and denying any use of illegal recovery tactics.

Even prominent names like Navi, founded by tech entrepreneur Sachin Bansal (founder of Flipkart), denied any wrongdoing. They claimed their agents undergo “rigorous training and adhere to ethical standards”. When pressed, Navi emphasised that their agents do not access customer contacts and that any policy violations are met with strict action. High-profile figures associated with the company, such as cricket legend MS Dhoni who features in an advertisement of such a company, declined to comment.

As for Li Xiang, the elusive Chinese businessman behind multiple loan recovery operations, he insisted that his companies comply with all local laws. He denied profiting from predatory practices and claimed to have ceased collaborations with Jialiang, though the documentary suggests otherwise.