HYDERABAD: The Hyderabad zonal office of the Enforcement Directorate (ED) on Friday said that it has filed Prosecution Complaints (PC) against several NBFCs, Fintech companies and individuals involved in instant loan lending business through various mobile applications under the provisions of Prevention of Money Laundering Act (PMLA), 2002 which the Special MSJ Court, Nampally, took cognisance of on Friday.
The agency initiated an investigation on the basis of 43 FIRs registered in 2020–21 by the Cybercrime police stations, Cyberabad and Rachakonda against various mobile applications and mobile numbers associated with various Fintech companies and NBFCs.
The investigation revealed that the Fintech companies used their funds and entered into agreements with defunct / dormant / non-performing NBFCs to indulge in short-term lending at exorbitant rates and by charging very high processing fees through mobile applications. The mobile loan apps, while sanctioning loans, took access to private data of the borrowers such as images, messages and contact details. This data was then misused to coerce the borrowers to repay the loans. The borrowers were also offered loans at higher interest rates through other related loan apps to repay their existing loans which resulted in the borrowers falling in debt traps.
The agency said that the harassment and extortion compelled several borrowers to suicide.