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Karachi couple cooks the perfect car loan scam, fleeces hundreds

Firm closed outlets after raking in Rs50 million

SAMAA | - Posted: Feb 24, 2021 | Last Updated: 2 months ago
SAMAA |
Posted: Feb 24, 2021 | Last Updated: 2 months ago
Karachi couple cooks the perfect car loan scam, fleeces hundreds

The couple took down payments from over 500 people. Image: SAMAA Digital

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The police from three Karachi police stations are investigating a major scam in which a couple running a so-called car financing firm sucked up millions of rupees from hundreds of customers and disappeared without a trace after shutting its offices. Butt & Sons Pvt Ltd opened three branches in Gulshan-e-Iqbal, Tariq Road and DHA over the course of two years. So far, fourteen FIRs have been registered against it in three police stations. Seven FIRs were registered against the owners at Aziz Bhatti police station, five at Ferozabad and two at Defence police station. How the car loan scam worked The firm invited applications by posting an advertisement on OLX and a Facebook account.  It offered customers a car of their choice at a 5% interest rate. This was hugely attractive as banks usually have a car loan for 11% interest rate.  The company told applicants to come in person to one of their three outlets for paperwork.   When an applicant arrived at the branch, he or she was told to meet an Inquiry Officer first. This officer asked questions about the applicant’s residence and occupation and then sent them to the manager.  The applicant signed an agreement with the firm and made a down payment fixed in the negotiation. It was in the agreement that the inquiry officer would verify the applicant’s credentials and two guarantors.  “The verification process takes fifteen days to complete, starts from the day of the down payment and if any applicant cancels the deal before the start of verification then 26% will be deducted from his down payment,” the agreement said.  Some others conditions on the delivery and installment payments were mentioned in the agreement, but the process never moved once the down payment was made.Related story: 50 people have already lost their cars in this rental car scam What the victims experienced Hundreds of people fell for it. “I booked a Mira on August 22, 2020 and paid Rs100,000 as a down payment,” said a resident of Lyari, Naveed. “The total cost of the vehicle was Rs1.2 million, but the company kept insisting that the guarantor mentioned in the agreement was incorrect.”  Naveed said that he replaced many guarantors in order to get the booked car, but the company told him that each one was not correct. “When I was exhausted, I went to the office on Tariq Road on January 15, but found it locked,” he said. Abu Muhammad Fahad Syed, who lives in Gulzar-e-Hijri, had the same experience. He booked a Honda City for Rs2.4 million and paid Rs100,000 as a down payment on September 31, 2020, but the company kept saying his guarantor was not correct as well. “When I fulfilled all the requirements, the guarantor needed to be approved and then they showed some defaults in my file,” Syed said. “On January 19, I visited the Tariq Road branch to get my down payment back, but I found it locked.” Whistleblowers A staffer, requesting anonymity, told Samaa Digital that the company opened its first outlet in Gulshan-e-Iqbal and then moved to Tariq Road and DHA.  “Initially, a person namely Bilawal Khan Baladi ran the affairs of the company, but he later left by handing it over to Rayyan Butt,” the staffer said. “Rayyan married a staffer called Waniya, and since then the couple was looking after the three branches.”  The staffer, who claimed to have a record of all the victims, said that the firm took Rs100,000 from more than 500 people, but did not hand over a single car. There were 56 employees in three branches. “The owners offered a fixed salary and commission on booking a car,” the staffer said. “I got Rs25,000 monthly but I would get Rs1,000 as a commission for booking a car.” Even this staffer found the office locked when they went last month. “I called Rayyan and Waniya but their cell phones were switched off.”  The owners fled but the victims went to the police and registered cases against us, the staffer maintained. Police investigation Aziz Bhatti Station Investigation Officer (SIO) Inspector Fareeduddin confirmed that seven cases have been lodged against Butt & Sons at his police station. He was unable to share any development however, and said he would upon his return to Karachi. Ferozabad SIO Inspector Tariq Baig said that five cases were registered at his police station and a number of people had come every day to ask to be included in the investigation.   The couple had left the city and gone into the hiding, but the police had traced and arrested three key staffers a few days back. The accused were presented in court and sent on judicial custody but secured bail.  
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The police from three Karachi police stations are investigating a major scam in which a couple running a so-called car financing firm sucked up millions of rupees from hundreds of customers and disappeared without a trace after shutting its offices.

Butt & Sons Pvt Ltd opened three branches in Gulshan-e-Iqbal, Tariq Road and DHA over the course of two years. So far, fourteen FIRs have been registered against it in three police stations. Seven FIRs were registered against the owners at Aziz Bhatti police station, five at Ferozabad and two at Defence police station.

How the car loan scam worked

The firm invited applications by posting an advertisement on OLX and a Facebook account. 

It offered customers a car of their choice at a 5% interest rate. This was hugely attractive as banks usually have a car loan for 11% interest rate. 

The company told applicants to come in person to one of their three outlets for paperwork.  

When an applicant arrived at the branch, he or she was told to meet an Inquiry Officer first. This officer asked questions about the applicant’s residence and occupation and then sent them to the manager. 

The applicant signed an agreement with the firm and made a down payment fixed in the negotiation. It was in the agreement that the inquiry officer would verify the applicant’s credentials and two guarantors. 

“The verification process takes fifteen days to complete, starts from the day of the down payment and if any applicant cancels the deal before the start of verification then 26% will be deducted from his down payment,” the agreement said. 

Some others conditions on the delivery and installment payments were mentioned in the agreement, but the process never moved once the down payment was made.

Related story: 50 people have already lost their cars in this rental car scam

Pakistan cost of car loans drops to two-year low

What the victims experienced

Hundreds of people fell for it.

“I booked a Mira on August 22, 2020 and paid Rs100,000 as a down payment,” said a resident of Lyari, Naveed. “The total cost of the vehicle was Rs1.2 million, but the company kept insisting that the guarantor mentioned in the agreement was incorrect.” 

Naveed said that he replaced many guarantors in order to get the booked car, but the company told him that each one was not correct. “When I was exhausted, I went to the office on Tariq Road on January 15, but found it locked,” he said.

Abu Muhammad Fahad Syed, who lives in Gulzar-e-Hijri, had the same experience. He booked a Honda City for Rs2.4 million and paid Rs100,000 as a down payment on September 31, 2020, but the company kept saying his guarantor was not correct as well.

“When I fulfilled all the requirements, the guarantor needed to be approved and then they showed some defaults in my file,” Syed said. “On January 19, I visited the Tariq Road branch to get my down payment back, but I found it locked.”

Whistleblowers

A staffer, requesting anonymity, told Samaa Digital that the company opened its first outlet in Gulshan-e-Iqbal and then moved to Tariq Road and DHA. 
“Initially, a person namely Bilawal Khan Baladi ran the affairs of the company, but he later left by handing it over to Rayyan Butt,” the staffer said. “Rayyan married a staffer called Waniya, and since then the couple was looking after the three branches.” 

The staffer, who claimed to have a record of all the victims, said that the firm took Rs100,000 from more than 500 people, but did not hand over a single car.

There were 56 employees in three branches. “The owners offered a fixed salary and commission on booking a car,” the staffer said. “I got Rs25,000 monthly but I would get Rs1,000 as a commission for booking a car.”

Even this staffer found the office locked when they went last month. “I called Rayyan and Waniya but their cell phones were switched off.” 

The owners fled but the victims went to the police and registered cases against us, the staffer maintained.

Police investigation

Aziz Bhatti Station Investigation Officer (SIO) Inspector Fareeduddin confirmed that seven cases have been lodged against Butt & Sons at his police station. He was unable to share any development however, and said he would upon his return to Karachi.

Ferozabad SIO Inspector Tariq Baig said that five cases were registered at his police station and a number of people had come every day to ask to be included in the investigation.  

The couple had left the city and gone into the hiding, but the police had traced and arrested three key staffers a few days back.

The accused were presented in court and sent on judicial custody but secured bail.  

 
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