Loan sharks turn sex offenders: 8 points on AP ‘call money’ scam | india | Hindustan Times
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Loan sharks turn sex offenders: 8 points on AP ‘call money’ scam

The ‘call money sex’ scam has become the latest controversy to take Andhra Pradesh by storm with many high-profile businessmen and even political leaders being arrested by the state police.

india Updated: Dec 19, 2015 22:20 IST
HT Correspondent
Andhra Pradesh scam

The latest political controversy that has taken Andhra Pradesh by storm has been the ‘call money sex’ scam, which has resulted in the arrest of many businessmen and political leaders.(Getty Images)

The ‘call money sex’ scam has become the latest controversy to take Andhra Pradesh by storm with many high-profile businessmen and even political leaders being arrested by the state police.

The massive blackmail, extortion and sex scandal linked to “call money” was exposed after female victims revealed that they were sexually exploited after they failed to repay their loans.

A statewide crackdown by the police over the last couple of days has led to the arrest of almost 200 moneylenders, including leaders of different political parties and their kin. Hundreds of others have also been detained for questioning.

Here is all you need to know about the scam:

What is the scam?

Under call money, loans are offered on calls at a very high interest rate ranging between 60 to 200%. A sex racket under the cover of call money was unearthed last week after a victim in Vijayawada complained to the police that the money lender sexually exploited her after she failed to pay back a loan. Some others complainants have also come forward with similar disclosures.

How does it operate?

Moneylenders deliver the loan amount to the customers against promissory notes and cheques. The lenders insist on pledging property documents with them and those owning property get huge loans of up to Rs 20 lakh or 30 lakh, depending on the value of their property and need. The moneylenders also go to the borrower’s place to collect interest regularly and make entries in a small book. If a borrower fails to pay the interest of one month, it is added to the principal amount of next month’s instalment, thus, the interest payable from next month increases.

How organised is the racket?

It is a well-organised racket which enjoys political patronage as well. The lenders even use bouncers to threaten, intimidate and extort defaulters and even grab their property. It is a totally illegal business which has been going on for decades. Anybody can get into this business with any amount of money.

Who are these money lenders? Are they like chit fund operators, neighbourhood pawn shop owners or building mafia etc?

They are unregistered private lenders who are mostly rich businessmen from economically, socially and politically powerful section of the society. Politicians from various parties and government employees are also engaged in this business. Some of them run unauthorised chits. They are mostly individuals but rich people invest in their business, expecting good returns. Such investors get half of the interest amount which is collected. Pawn brokers are not involved in this business.

What kind of money is involved in the transactions?

According to a rough estimate, the money involved is over Rs 10,000 crore across Andhra Pradesh.

Do all victims belong to middle-class?

Mostly the poor and the middle-class people. The victims include petty traders, drivers, small businessmen and middle-class families who need a loan to spend on weddings, medical treatment and education. These families depend on such call money operators because banks and financial institutions evaluate their property conservatively and offer lesser amounts. A private moneylender will be ready to lend up to 100% value of the property.

Number of victims, arrests in the case

So far over 250 victims have come forward to lodge complaints. Four have committed suicide and three others attempted to end their lives. One woman died of shock after she was evicted from her house. There are at least five cases of sexual exploitation. Police have arrested 188 people.

Which political parties are involved in the case?

Second rung leaders of all major political parties are involved in the scam. According to official figures, out of 188 people arrested, 65 belong to opposition YSR Congress, 20 are from ruling TDP and four belong to its alliance partner BJP. Twelve from the Congress party, six from CPI, two from Lok Satta and one from CPI-M were also among those arrested.

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