One click to borrow, but at what cost? CID probes instant loan services

The Criminal Investigation Department (CID) has launched an investigation into online instant loan services following reports that customers are facing difficulties due to high interest rates and repayment conditions, Sri Lanka Police said.

According to the Police, a number of instant loan services are currently being promoted through advertisements on social media, allowing individuals to obtain loans online through mobile phone applications.

Police said the Financial Crimes Investigation Division of the CID commenced investigations after receiving information that some institutions providing such loans were causing difficulties to borrowers by charging loan instalments at high interest rates when the loans were repaid.

Preliminary investigations have also revealed that some borrowers had obtained loans without properly understanding the terms and conditions imposed by the institutions providing the facilities.

Police noted that the conditions stipulated by these institutions clearly explain how loan repayments will be recovered and state that risks arising from the use of the applications are to be borne by the borrower.

However, investigators have observed that some individuals had installed the mobile applications and proceeded to obtain loans without properly reading or understanding the relevant terms and conditions.

Sri Lanka Police therefore urged the public to exercise caution when obtaining instant loans through online platforms and to carefully read and understand all conditions before agreeing to a loan.

Police said borrowers should particularly ensure that they have a clear understanding of the repayment conditions and other requirements imposed by the lending institution before accepting an online loan facility.

The public has been advised that obtaining a clear understanding of the terms before taking such loans could help prevent financial losses and other difficulties arising during repayment.

Police have urged anyone considering an online instant loan to act cautiously and make an informed decision after fully reviewing the conditions attached to the facility. (Newswire)

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