Illegal loan apps is a tragic pandemic that has already claimed the lives of innocent victims. Masking themselves as a legitimate company (often tweaking the names of popular financial brands like KreditBee that becomes CreditBe), these apps have been duping millions across the world. Their MO? 

• An individual is desperate for quick funds with minimal documentation 
• They  download these apps after seeing targetted apps on social media 
• Once they receive the money, they are charged exorbitant interest rates and harassment 
• They are subjected to blackmail (Based on photos and contacts that are extracted from their device without their knowledge) 

The nature of these apps also denotes a more sinister ulterior motive than just scamming people. They are rapidly becoming sophisticated fronts for money laundering operations by enabling criminals to funnel illicit funds without detection. 

These platforms end up acting as the perfect middlemen, facilitating the movement of illegal funds tied to activities such as drug trafficking or human trafficking. In some cases, these apps serve as payout channels, enabling criminals to pay operatives or fund illegal activities across borders. By mimicking genuine financial transactions, they blend into the regular flow of money, making it hard for regulators to trace illicit activity. The rapid setup and shutdown of these platforms further complicate efforts to track their movements, leaving banks and financial institutions at risk of non-compliance with AML and CFT regulations.

Without effective oversight, these illegal apps infiltrate the financial ecosystem, connecting ordinary users and institutions to organized criminal networks. Financial institutions are often left unaware until it’s too late, only discovering their involvement through regulatory crackdowns or after a victim falls prey to the scheme.

We recently interviewed Babu Lal, a relentless advocate who has single-handedly exposed thousands of predatory and illegal loan apps on platforms like Google Play Store and Apple App Store. See his work here.

His efforts have been pivotal in bringing attention to the growing problem of illegal lending apps, especially in lower-income communities where people, in desperate need of quick cash, often fall victim to these scams. Through this conversation, we aim to shed light on the severity of the issue and explore ways to combat it. 

‍

Here we go: 

‍

Understanding the scale of the problem 

‍

Bureau team: Could you introduce yourself and walk us through what you’ve been doing over the last 14-15 months?

‍

Babu Lal: Hi, Rahi. Thank you for recognizing the work I’ve been doing. It’s been about 14-15 months since I started, and I’ve identified and reported around 5,600 illegal apps. It’s encouraging that we’re having this conversation now because this issue needs to reach more consumers and stakeholders so they can take meaningful action.

‍

‍

It all started when I was working as a product manager, consulting for some wealth management apps. Last year, I noticed something strange while researching on the App Store. Some unfamiliar apps were trending in the top 20, which caught my attention. I conducted a basic background check to see who was behind these apps, looking at their websites and teams. What I found was unsettling—most of the information was either false or incomplete, and the apps were clearly not legitimate.

‍

When I looked into the developers, some were reputed companies, including US-based IT services companies and some Indian firms. But none of them had anything to do with finance. 

‍

That was my first red flag: why would a non-financial company be developing a loan app? 

‍

I found about four or five of these apps and thought it might be a one-time issue, so I posted about it on Twitter, assuming that Apple, known for its strict app reviews, would take care of it.

‍

However, a week later, I discovered even more of these apps. I checked the top 200 apps on the Apple App Store and found that 27 of them were fake. These apps were mixed in with genuine financial and fintech apps, which was alarming. Despite some media attention and a few apps being removed, new ones would take their place, often impersonating legitimate businesses.

‍

Bureau team: That’s shocking. So even after some apps were taken down, others just kept coming?

‍

Babu Lal: Exactly. For every 10 apps that were removed, 10 new ones would appear. These new apps were even more deceptive, impersonating real businesses to publish their fake loan apps. They were being promoted right within the app store, so when a user searched for "loan" or "personal loan," these fake loan apps were displayed.

‍

I couldn’t believe it—the apps were fake, the developer accounts were fake, and yet they were distributing loans that weren’t regulated. And on top of that, they were running ads inside the app store itself! It seemed like the entire system was being misused.

‍

Now, 15 months later, I’ve identified over 5,600 such apps that have been removed, but there are still about 200 on the Apple App Store and around 40-50 on Google Play, waiting to be taken down. It’s not just in India either; I’ve found similar patterns in countries like Indonesia, the Philippines, and Mexico. 

‍

For example, on the Mexico App Store, about 33% of the top 200 finance apps were fake.

‍

Modus operandi: Fake Loan Apps 

‍

Bureau team: Wow, that sounds like a lot of work. Can you share more about what’s happening on these digital stores?

‍

Babu Lal: Sure, let me show you what’s going on. So, these fraudsters often create developer accounts that impersonate legitimate businesses. They use bogus websites, fake addresses, and fake contact details to get their apps approved. Then, they promote these apps aggressively, even using Google and Apple’s search ads.

‍

Bureau team: When you say these apps are being promoted, does that mean the app owners are spending money to advertise them?

‍

Babu Lal: Exactly. These app developers are spending a lot of money on digital marketing channels—Google Ads, Facebook Ads, and so on—to get their apps trending. Initially, they burn a lot of money to get those first few thousand downloads, which helps them enter the top 200 trending apps. 

‍

Once they’re there, they start getting organic downloads, and that’s when things really take off. It’s like a snowball effect. Before you know it, these apps are beating well-established companies in the search results, even though they’ve only been around for a few days.

‍

Bureau team: It’s surprising that these apps can rank so high in such a short amount of time. How does that happen?

‍

Babu Lal: That’s the million-dollar question. These fraudsters have mastered app store optimization (ASO). They’re somehow able to outpace legitimate companies like Google Pay or SBI, which have been on the platform for years.

They use generic keywords like *instant loan* to boost visibility. Scammers also create false customer service numbers and other bogus content on platforms like LinkedIn or Medium to create a web of credibility.  For example, within a couple of days, you’ll see these apps with thousands of five-star ratings, which buries any negative reviews about their scams. It’s all very calculated.

‍

Bureau team: Could you show us an example of one of these illegal lending apps in action? 

‍

Babu Lal: Sure, let’s take a look at the Apple App Store. I’m tracking apps in eight countries right now, and I’ll show you one of the top fake apps I found. For instance, this one is called "KCPL Rupee Personal Loan," released just 10 days ago, on August 29th. Until yesterday, this app was in the top 10 finance apps on the App Store. Today, it’s ranked 23rd. So, it’s still doing well, but its lifespan will probably be short—about a week or so—because these scammers know their app can be removed at any time.

‍

‍

Red flags to look out for to spot illegal lending apps 

‍

Bureau team: What are some of the red flags you look for in these apps? What would a regular user need to watch out for?

‍

Babu Lal: The first red flag is the app’s name itself—if it’s something unusual like “KCPL Rupee Personal Loan” and you’ve never heard of it, that’s your first sign. But let’s say you still want to check it out. 

‍

When you look at the app's ratings and reviews, you’ll often find glowing five-star reviews, but if you dig a little deeper into the one-star reviews, you’ll see complaints about scams. For example, people might say the app promised a 180-day loan, but in reality, it only offered a 7-day loan. Or they might say that the loan amount was much lower than advertised.

‍

Bureau team: So, just to clarify, what would you recommend users do if they come across an app like this?

‍

Babu Lal:  First, if the app is being promoted as an ad on platforms like Facebook or Google, I’d say just avoid it altogether. There’s a very high chance—like 99%—that it’s a scam. 

‍

Second, if you’ve never heard of the app before, take a few minutes to do some research. Look up the developer, check if there’s a legitimate website, and read through both the positive and negative reviews.

‍

Stakeholders and victims of these predatory apps

‍

Bureau team: You mentioned earlier that even legitimate businesses are being impersonated. Could you explain that further?

‍

Babu Lal: Yeah, so scammers often use the names of real companies to make their apps look legitimate. For example, in this case, the developer is listed as “Shri Om Finance Ltd.,” which is a real NBFC (Non-Banking Financial Company) registered in India. However, this company has no online presence or app. They’re just being used as a front to make the app seem trustworthy.

‍

Bureau team: That’s concerning. Could you elaborate on how they co-opt these company identities?

‍

Babu Lal: These scammers are exploiting gaps in both app store verification and company digital presence. They take public information from websites like the Ministry of Corporate Affairs (MCA) to create a fake online persona.

The scam apps use this information to build credibility, but if you visit their websites, they’re often basic one-page sites with no real team information or contact details—just vague addresses and phone numbers. The problem worsens when app stores don't cross-verify this information.

‍

Bureau team: You also touched on how fake loan apps damage the reputations of genuine companies. Can you expand on this?

‍

Babu Lal: Absolutely. These fake loan apps not only deceive consumers, but they also hurt legitimate companies. For instance, apps like *MoneyTap*, *StashFin*, or *KreditBee*—which are real loan platforms—are in competition with these fake apps for customer acquisition. Yet, these genuine companies aren’t collectively speaking up.

This silence is costing them, as these fake loan apps are eating into their business, and customers may not be able to differentiate between a real and fake loan app.

‍

Next steps forward: How do we protect ourselves? 

‍

Bureau team: It’s so tricky because, on the surface, everything looks legitimate. Is there any way to protect against this?

‍

Babu Lal: Unfortunately, it’s really hard for consumers to know. But one thing I always recommend is to look for transparency. If you can’t find a legitimate person or a contact behind the app, that’s a huge red flag. These scammers rely on anonymity to keep running these schemes.

‍

‍Bureau team: You’re right. It's surprising that these companies don't raise more of an alarm. Do you think there’s a role for technology providers, like those focused on reputation management, to help?

‍

Babu Lal: Yes, definitely. Companies with strong online operations can protect their brands more effectively, but many of these smaller companies don’t even have an online presence. That makes them sitting ducks for impersonation.

Tech providers need to offer solutions that can detect fraud faster. For example, automated systems could flag suspicious apps based on certain patterns—like a mismatch between the company name and the app category. But even beyond detection, these systems need to notify the brands whose names are being misused. 

‍

Bureau team: So there’s clearly a gap between detection and action. How should platforms like Apple or Google respond?

‍

Babu Lal: Platforms need to be more proactive. Right now, the burden is on the companies or users to file complaints before action is taken. But by the time this happens, the damage is already done. These illegal lending apps have gained traction, collected data, and tricked users. App stores should implement better initial screening and take down flagged apps without waiting for formal complaints.

‍

—--- 

‍

Bureau: Your AML champion 

‍

To address the growing threat of illegal lending apps, immediate action is needed in three critical areas:

‍

1. Protecting banks' reputations and ensuring compliance  

Banks and financial institutions face serious risks when illegal lending apps facilitate money laundering, often without their knowledge. Bureau helps banks stay compliant with AML and CFT regulations through real-time transaction and customer behavior monitoring. This allows institutions to detect and stop suspicious activities before they escalate, protecting both their reputation and legal standing.

‍

2. Safeguarding vulnerable financial groups

Lower-income communities are often the primary targets of illegal lending apps. These predatory platforms exploit individuals in need of urgent loans, leading to extortion or even turning them into unwitting mules for criminal activities. Bureau works to shut down these illegal networks, ensuring that those seeking financial help aren’t caught in a trap that could ruin their lives financially and legally.

‍

3. Maintaining the integrity of digital services and app stores 

As illegal lending apps multiply, they jeopardize the integrity of digital platforms like app stores. Stricter verification processes for developer accounts are essential to stop bad actors from launching these apps. Bureau advocates for tougher scrutiny of developers to ensure that only legitimate, trustworthy businesses operate within these ecosystems, protecting both users and digital services from fraud.

‍

Schedule a free consultation with Bureau.

‍