The Cybercrime Wing of the Federal Investigation Agency (FIA) on Friday said it has arrested nine suspects and booked 19 others for allegedly blackmailing citizens through loan-giving mobile applications (apps).

The development comes a day after the agency launched an investigation into the death of a man in Rawalpindi — who purportedly ended his life — due to “threats” made by loan apps over his failure to repay the ballooning interest on his debts.

A day earlier, the FIA team raided two offices of the loan app in G-8 sector, sealed the offices and confiscated laptops and other material.

In a statement issued today, an FIA spokesperson said the cybercrime cell, along with the financial services, conducted raids in several areas of Rawalpindi during which nine suspects were held and first information reports were registered against 19.

“Inspector Badar Munir sealed a number of offices inside a plaza located on the Saidu Sharif road,” it said in a statement.

The FIA said the suspects were given targets to make 100 to 150 calls a day to citizens, their friends and families on a daily basis. It added that in the raided offices, a separate department was being run to make what it described as “torture calls”.

The FIA said the departments were called “D-0, D-1, D-2, DS-1, DS-2, and DS-3” and the suspects would collect personal information of citizens through the loan apps. “Afterwards, they used it to harass people.”

The FIA added that a significant amount of documents, computers, laptops and mobile SIM cards were taken into possession during the raid.

The arrested suspects were being interrogated, while an investigation was underway to nab others, it added.

Earlier today, Prime Minister of Pakistan’s Strategic Reforms Unit head Salman Sufi said the issue of loan shark operators was a “systemic issue which requires a proper legislation and strict enforcement”, adding that the government would be working with the Securities & Exchange Commission of Pakistan, FIA and State Bank to end the “menacing and corrupt business”.

He said a few foreign nationals were also found to be involved and their data and devices were being forensically audited.

“These actions will continue and more such companies will be brought under prosecution for illegal and predatory practices.

“Taking advantage of someone’s financial distress is unacceptable,” he tweeted.

Pressed by for details, Sufi said the FIA raided the office of the Bharosa App in Islamabad’s Sector G-8, adding that equipment and materials were seized from the site while it was also found that five of its employees were foreigners.

Questioned about the suicide, he said such instances were most of the time not highlighted because victims were afraid of the threats and blackmailing.

“An audio of the phone call of an employee of Bharosa App has also come to the fore in which the accused can be heard threatening Usama (nephew of the deceased man) of leaking personal data from the cell phone in case of the non-payment of the loan,” Sufi said.

Questioned about reforms to tackle the issue, he said addressing issues related to loans, financial distress, and blackmail required a comprehensive approach involving various government agencies and stakeholders.

He pointed out the following steps the government had taken in this regard:

  • Financial education and awareness
  • Consumer protection laws
  • Mental health support
  • Strengthening law enforcement
  • Collaboration with financial institutions

Man dies by suicide

The investigation into predatory loan apps was launched after a man died by suicide in Rawalpindi.

The deceased man’s wife, who wished not to be named, told yesterday that her husband had taken two loans from separate mobile apps, one of which had seen its principal plus interest amass to Rs0.7m.

The wife said he had initially taken a loan of Rs13,000 from EasyLoan app, which quickly soared to Rs100,000 a few days later due to interest. To pay back that loan, he took another loan from Bharosa app, which also rose to Rs700,000 in a few weeks, she added.

Her husband, she said, had lost his job six months ago, leaving the family unable to pay for their children’s school fees and rent.

According to her, the officials operating the app “used to call daily to threaten and scare” the family of police action against them if the loan repayment was delayed, and her husband died by suicide after growing tired of the threats.

Following the incident, the deceased man’s brother, Muzammil Husain, filed a complaint with the Race Course police station under Section 174 (police to inquire to report in suicide, etc) of the Code of Criminal Procedure.

Later, an FIA team, headed by Deputy Director Cyber Crime Tahir Jamil and Additional Director Abdul Rauf visited the man’s family and registered a case after recording their statements, a Dawn report said. reached out to the contact details shown on the apps but did not receive responses.

Luring citizens

Earlier this month, Dawn reported that scores of apps are currently out there luring average folk with instant credit, with misleading terms.

According to research done by Data Darbar, 27 of the apps featuring Google Play Pakistan’s top 100 finance apps were instant credit apps as of June 28. Of them, 19 were offering loans in the local rupee and the top eight alone had estimated downloads of 15.4 million since their launch.

There’s only one more licenced player operating in this space: Sarmaya Microfinance. Many are not registered entities, though the modus operandi of both kinds is similar. Promising low interest rates, they lure users to borrow, often even disbursing the amounts without their confirmation.

However, a sizable chunk of the amount is actually deducted at source, between 21pc and 38pc depending on the app, in the name of service and/or processing charges, which is often for 30-90 day periods, sometimes even less.

Yet the annual percentage rates, which is the total cost of borrowing in annual terms, are reported to be in the range of 11-39pc.

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