Crackdown On Illegal Loan Apps: Authorities Turn Focus To Karachi Based Gang

Crackdown On Illegal Loan Apps: Authorities Turn Focus To Karachi Based Gang
Having launched a crackdown against illegal online loan apps operating in the country, the Federal Investigation Agency (FIA) and the Punjab Police are looking to expand the scope of their investigations after discovering the alleged involvement of a gang based in Karachi.

The crackdown was launched after one of the apps hounded a Rawalpindi man to the point that he hung himself last week.

The authorities suspect that some of the individuals suspected to be involved in one of the apps may have criminal and or political connections apart from enjoying support from within the local police department in Karachi.

What had happened

Last week, 42-year-old Rawalpindi resident Muhammad Masood committed suicide in his home.

Masood's wife, who wished not to be named, told The Friday Times that Masood lost his job around six months ago and was very upset that he would not be able to pay the school fees of their two children and their house rent.

READ MORE: Man Hounded By Online Loan Shark App For Rs13,000 Hangs Himself In Rawalpindi

“One day he came across an app known as 'EasyLoan app' from which he took a Rs13,000 loan which rose to Rs100,000 within days because of high interest,” she recalled, describing the debt trap Masood had found himself in.

She added that her husband then took a loan from another app, the Bharosa app, to pay back the loan he had taken from EasyLoan.

But within a few weeks, the new loan had compounded to become an astronomical sum.

"Although the apps initially informed my husband that he would have to return the loan at 14 percent interest, but it kept on increasing astronomically with each passing day,” she said in a disturbed tone.

The app operators continuously threatened and harassed him when he failed to repay his loan and interest.

Finding no other escape, Masood took his life, she said.

“He was tired of receiving threats from loan app operators."

In a first information report filed by his brother, Muzammil Hussain, at the Race Course Police Station in Rawalpindi on Monday, July 11, he said that Masood's family was still getting threats even after his death.

Hussain had lodged the FIR under Section 174 (police to inquire to report suicide) of the Criminal Procedure Code.

In subsequent investigations, the police and the FIA learnt that the app mentioned by Masood's family was just one of the apps he had taken a loan from and that he was deep in debt. His payable to just one of the loan apps had increased to Rs0.7 million - principal and compounded interest.


A senior FIA official from the body's Cyber Crime Wing, who did not disclose his name because he was not authorised to speak to the media, said that they had been ordered to launch a crackdown against all such online loans apps which are illegal and are blackmailing the unsuspecting public.

The official went on to claim that they have made a major breakthrough and will soon bust at least one gang behind one of the apps.

How do they operate?

A senior Punjab police official who is privy to this development but did not wish to be named told The Friday Times that of the gang they have uncovered, they have so far traced two to three individuals involved.

These men, the official said, are originally from Karachi. They were identified as Nasir Ali Asghar, Ashraf Ali, and Anbar Shahab. The official said that they have managed to obtain records of all the FIRs lodged by these individuals, tracking them via their computerised national identity cards (CNICs) and phone numbers.

Per this data, he said that they discovered that Nasir lodged 54 FIRs, Anbar Shahab registered 65 FIRs, and Ashraf Ali registered eight FIRs.

Some of the earliest FIRs lodged by these individuals date back to 2020.

The FIRs were lodged in police stations across Karachi and almost all of them were lodged under three sections of the Pakistan Penal Code (PPC):

Section 489-F: Dishonestly issuing a cheque,

Section 420: Cheating and dishonestly inducing delivery of property, and

Section 34: Acts done by several persons in furtherance of common intention.

Explaining how they operate, the official claimed that these men have managed to obtain a list of the individuals who have applied for certain loans from banks or other financial institutions.

The official claimed that these men usually target unsuspecting victims from Punjab. They then lodge an FIR to pressurise and blackmail them into returning the principal sum and the accrued interest, which can often be several multiples of the principal amount.

The writer is a senior correspondent at The Friday Times with a focus on politics, economy and militancy.