The Financial Crimes Investigation Division of the Criminal Investigation Department has begun investigating online instant loan services, following reports that borrowers are being put under severe pressure by the interest rates charged when they repay.
The investigation was announced in a statement from the Police Media Division, Hiru News reported.
What is being examined
Police said a number of instant loan services are being promoted through advertisements on social media, allowing borrowers to take out loans entirely online through mobile phone applications.
Investigators opened the file after receiving information that some of the institutions behind these apps were charging high interest on instalments at the point of repayment, leaving customers in difficulty.
Preliminary findings point to a disclosure problem rather than a hidden one. Police said the conditions these institutions set out do explain how repayments will be recovered, and state that risks arising from use of the applications are borne by the borrower — but that investigators found borrowers had installed the apps and taken loans without properly reading or understanding those terms.
The warning to the public
Sri Lanka Police urged anyone borrowing through an online platform to read and fully understand the lender’s conditions before agreeing, saying careful attention at that stage can prevent avoidable financial loss and hardship.
The advice sits alongside the police’s broader work on digital financial harm, including an island-wide crackdown on online fraud.
What the reports do not say
Neither account names any of the applications or the institutions behind them, states how many complaints were received, gives the interest rates in question, or says how many borrowers are affected.
Critically, neither report says whether these lenders are licensed or regulated by the Central Bank — the question that determines whether borrowers have any regulatory recourse at all, and whether the conduct described is unlawful or merely punishing. Nor do they indicate what offences, if any, are under consideration, or whether the Central Bank is involved in the investigation alongside the CID.
