MeitY’s big crackdown on advertisement of fraudulent loan apps

January 5, 2024
Big Crackdown on advertisement

By Anuradha Gandhi and Isha Sharma


Numerous reports shed light on the concerning trend where considerable number of victims have fallen prey to several fraudulent loan apps, which exploits individuals in need by lending small amounts of money with exorbitant high interest rates. These apps not only demand personal information but also impose multiple ‘hidden charges’ on users.

Upon downloading them, these apps gain control of contacts and photographs in users’ phones as well as ID cards, which they use to extort the borrowers. If the customers do not repay the loans on time and sometimes even after they pay, these apps share the information with call centres who then, using their devices, harass and humiliate people into repaying the loan.

These apps being openly advertised on online platforms, lead to a barrage of complaints from individuals who claim to have been harassed and blackmailed even after repaying the borrowed amounts.

Tragically, in one such instance, a 22 year old student reportedly took his own life, citing harassment by a loan app. 1This is not a story of one but the collective experiences of many who has been subjected to threat and abuse by these fraudulent loan apps. Initially, these apps employ tactics such as accessing the victim’s contact list and making calls. In case of resistance, they escalate by infiltrating the victim’s photo gallery, manipulating images and sending them back. This manipulative strategy induces panic among the victims, coercing them to comply with the scammers’ extortion demands.

MeitY’s Advisory directing not to permit any advertisements of illegal loan and betting apps

In response to this surge in deceptive practices adopted by such apps, the ministry had issued a pertinent advisory directing all social media platforms to take “additional measures” to ensure that they don’t host advertisements of fraudulent loan apps, warning that the “consequences” will be the “sole responsibility” of such intermediaries/platforms.2

“Intermediaries and platforms should take additional measures to not permit any advertisements of illegal loan and betting apps having potential to scam and mislead the users, the consequences of which will be the sole responsibility of the intermediaries/platforms,” states the advisory.

Earlier on December 18, 2023, while speaking in the Lok Sabha during the Winter Session of Parliament in New Delhi, the Union Finance Minister Shrimati Nirmala Sitharaman informed the Parliament that Google had suspended or removed over 2500 fraudulent loan apps from its Play Store between April 2021 and July 2022. It reviewed approximately 3500 to 4000 loan lending apps.3

The finance minister added that the government is constantly engaged with the Reserve Bank of India (RBI) and other regulators and stakeholders concerned with controlling fraudulent loan apps, adding that the matter is regularly discussed and monitored in the meetings of the Financial Stability and Development Council (FSDC).

As per the Indian Express report, it has been asserted by Shri Rajeev Chadrasekhar that they are working on a robust mechanism to deal with loan apps which will be rolled out soon.

This move is contextualized within the government’s proactive measures to combat proliferation of fraudulent loan and betting apps. As cases of exploitation continues to escalate, the advisory aims to safeguard users and intensify the battle against such unscrupulous practices by introducing a robust mechanism.

However, to know more in detail with regard to the earlier advisories being issued by the MeitY to social media intermediaries to tackle deepfake menace, kindly refer to our article


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