Zerodha CEO shares ‘red flags’ of finance apps, warns people | Trending

Nithin Kamath, Founder and Chief Executive Officer (CEO) of Zerodha took to X to warn people about finance apps, especially loan-related apps. He said apps that ‘ask for full access to contacts, messages, photos, are a red flag.’ Since these kinds of apps are ‘digital avatars of predatory moneylenders’ Kamath cautioned people about them. Nithin Kamath shared a tweet on money lenders and loan apps. “The number of people getting fleeced shady and illegal loan apps has gone up significantly. Many individuals caught up in the web of these apps frequently resort to drastic actions, such as suicide. For every illegal loan app that’s banned, two new ones pop up. It’s become a game of whack-a-mole,” wrote Kamath. (Also Read: Nithin Kamath, Collective Arts Network launch fund to back consumer brands) Wrap up the year gone & gear up for 2024 with HT! Click here He further shared the tactics used these apps to make money. He wrote, “What makes these apps disgusting is the fact that many of them deduct as much as 10% upfront. Then there’s the fact that interest rates range from 50% to 100%, or even 200%+. It’s impossible for people who borrow on these apps to repay with such usurious terms. But considering people who borrow on these apps are desperate, they don’t notice the fine print.” At the end of his tweet, he also informed people that these loan sharks can resort to physical threats to recover money. They can also harass people calling all their contacts and sharing their personal photos. Take a look at the tweet shared Nithin Kamath here: This post was shared on January 8. Since being posted, it has gained close to four lakh views. The share also has close to 2,000 likes and numerous comments. Here’s what people said about it:An individual wrote, “Taking loans from these fraud apps is the biggest make one can make. The government seriously should do something here, there should be some reporting platform where people can submit details and then after the government takes charge.” A second commented, “As these lending apps often operate across borders, international collaboration is essential for effective regulation and enforcement. Cooperation between countries can help curb the global reach of predatory lending practices.” “Great insights, thank you!,” posted a third. A fourth said, “Youngsters must understand that things that appear too easy to be true are actually fraud. Most of these loan apps are illegal. Don’t fall for such traps.”