A Rawalpindi special court on Saturday granted the Federal Investigation Agency (FIA) four-day physical remand of the nine suspects that were arrested a day ago for allegedly blackmailing the financially crippled through predatory loan apps.

The action against the apps and its staff was taken after a man in Rawalpindi died on Wednesday, purportedly by suicide, due to “threats” made by loan apps over his failure to repay the ballooning interest on his debts.

The next day, the FIA’s cybercrime wing had launched an investigation into the matter, following which it arrested nine suspects and booked 19 others.

The suspects were presented in the court of Judicial Magistrate Mujtaba ul Hassan today.

During the hearing, the FIA sought a 14-day physical remand of the suspects, whose counsel sought an acquittal for his clients — a plea that was rejected.

During the hearing, the investigation officer said that among the suspects were employees of Sarmaya Microfinance (Pvt) Ltd, which is one of the two licensed apps operating in this sphere, according to a 2022 Dawn report.

The hearing

At the outset of the hearing, FIA Inspector Badar Shahzad Khan Niazi informed the court that the suspects comprised “two call centre representatives, three team leads, two quality team leads and two operational managers”.

Requesting the court for a 14-day physical remand of the suspects, Niazi said they were employees of Humraah Financial Services Ltd and Sarmaya Microfinance (Pvt) Ltd and used to “blackmail the public”.

“Muhammad Masood committed suicide due to blackmailing and threats from the suspects,” he added.

The FIA official further said that other colleagues of the suspects involved in the matter were yet to be arrested and the mobile phones of the detained suspects were also yet to be recovered.

“The threats made to deceased Muhammad Masood via WhatsApp are also yet to be traced,” he told the court.

At this, the suspects’ counsel requested the court for their clients to be acquitted.

The lawyers argued that the FIA registered the case based on a report on social media and had not conducted an investigation.

They further said the suspects had “given the loan through Halal (lawful) means, asking for whose return was their right”.

However, the judge responded that the suspects could not be acquitted during the initial stage. “A person has lost his life — the FIA will find out the truth.”

Subsequently, the court granted the FIA a four-day physical remand of the suspects.

Meanwhile, Sarmaya Microfinance’s legal adviser Tayyab Malik, while speaking to Dawn.com, said the company was registered and licenced, and the deceased man was the company’s client for a year.

Malik also maintained that none of the arrested suspects by the FIA were the company’s employees.

However, he added that a staff member had contacted the late customer on July 11 for a reminder since his loan’s instalment date was July 14.

Malik said the number used for the phone call and the two numbers through which messages were sent to him had been given to the FIA Cyber Crime Cell.

The deceased had to pay the company Rs10,000-11,000 but the company has waived off the amount, he claimed.

FIA to send ‘comprehensive report’ to PTA: official

Earlier today, FIA Cyber Crime Wing Additional Director Chaudhry Abdul Rauf was asked by Geo News about the reasons for the delay in initiating the probe in the case.

To that, Rauf explained that the FIA initiates action after receiving a complaint. “We got to know about [the matter] related to this complaint through the media,” he added.

When asked about the strategy that the FIA planned to adopt against “illegal apps issuing loans”, he said the agency would “immediately start awareness action”.

The official added that the Securities and Exchange Commission of Pakistan (SECP) was responsible for regulating apps.

“The SECP should also check an app’s credibility and, after taking the PTA (Pakistan Telecommunication Authority) in the loop, determine whether an app should be launched and its [functions] are legal”.

Asked whether the FIA had the authority to get apps involved in malpractices deleted, he said a comprehensive report would be sent to the PTA in this regard. “We will ask them to remove apps involved in illegal activities and to resolve issues related to legal apps through patching.”

He urged citizens to report any cases or complaints of receiving threats from loan apps with the FIA, mentioning that this business of “easy loans through apps” was under way in full swing in various cities.

Rauf also explained that even if an app was regulated and officially legal but the app operator was able to access a user’s contact list and phone gallery, “it is wrong”.

In such cases, he said, the SECP should look into these matters and if “a company is not following its directions, their licence should be cancelled.”

FIA’s plea

The plea for suspects’ physical remand submitted to the court by the FIA, a copy of which is available with Dawn.com, states that Humraah Financial Services Ltd and Sarmaya Microfinance (Pvt) Ltd “were engaged in fraudulent and extortionate activities”.

It lists the names of the suspects as call centre collection tellers Maaz Talib and Kashan Bashir; team leads Abdullah Waheed, Muhammad Bilal and Hasnain Sadaqat; operation managers Muhammad Ahmer and Iftikhar Ahmed; and QA team leads Iftikhar Raza and Haziq Abbasi.

The plea asserts that the organisations “utilised deceptive tactics, including threatening phone calls and intimidating messages, to exploit borrowers”.

It further says that the companies also “illegally accessed personal media files and contacts” of the borrowers, “using them for extortion and blackmailing to gain unlawful financial benefits”.

“Tragically, these actions led to the suicide of Muhammad Masood, the victim in this case,” it concludes.

The FIA plea goes on to state that the agency has “found the involvement of multiple individuals and companies, involving the seizure of mobile phones and analysis of WhatsApp messages linked with the unfortunate suicidal incidence”.

The application asserts that the arrested suspects were “directly linked to the distress inflicted upon Muhammad Masood”, as they were “making threatening calls, tampering with evidence and following instructions to pressure customers for loan repayment”.

Stating that further investigation was needed, the FIA requested the court for a 14-day physical remand of the detained suspects.

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 21 per cent 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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