Indore Police have uncovered a finance company vehicle seizure racket in which private agents allegedly used leaked borrower data to illegally seize vehicles from loan defaulters and demand money for their return. One accused has been arrested in the case, while two others remain absconding, police said.

The case surfaced in Indore’s Hiranagar area after a local resident alleged that his financed motorcycle was forcibly taken away by three men who claimed to be acting on behalf of a finance company. Police said the accused were not authorised recovery agents but were working on commission and allegedly targeting borrowers whose instalments were overdue.

Complaint Triggers Probe

According to officials, the case came to light after Rajiv Nagar resident Shakeel Khan filed a complaint with Hiranagar police. Khan, a mechanic by profession, told police that he had purchased a motorcycle in 2025 through vehicle finance from L&T.

He alleged that while returning home from Aurobindo Hospital two days ago, three men intercepted him near the MR-10 area and accused him of defaulting on loan instalments. The men then forcibly took away his motorcycle and left the spot.

Fraud Recovery Tactic

Khan later approached the finance company office to verify whether the vehicle had been lawfully repossessed. Officials there reportedly told him that no authorised staff member had seized the motorcycle.

This raised suspicion and prompted Khan to begin tracing the vehicle on his own. During his search, he reportedly spotted one of the men riding the motorcycle. When confronted, the accused allegedly demanded money in exchange for returning the vehicle.

Police said this established that the seizure was not part of any lawful recovery process but an extortion attempt carried out under the guise of loan recovery.

One Accused Arrested

Acting on the complaint, Hiranagar police launched an investigation and arrested Neeraj Lodhi. During questioning, Lodhi allegedly admitted that he and two associates had been identifying vehicle owners with pending instalments and forcibly taking possession of their vehicles.

Police said the accused were working on commission and were not officially employed by any finance company. Investigators suspect they were part of an informal recovery network operating outside legal procedures and using borrower vulnerability for financial gain.

The two other accused named by Lodhi are currently absconding. Police teams have been deployed to trace and arrest them, as per reports.

Data Leak Under Lens

A key part of the investigation now centres on how the accused obtained sensitive borrower information. Police said preliminary findings suggest that lists of loan defaulters were being shared with the accused through unofficial channels.

According to investigators, the men received details of customers who had defaulted on instalments, including contact numbers and vehicle information, and used that data to identify and target victims.

Police are now examining whether insiders linked to finance companies or third-party recovery networks leaked customer records. Officials indicated that those found responsible for sharing data could also be made accused in the case.

Recovery Rules Questioned

The case has raised fresh questions over loan recovery practices and the role of unauthorised agents in vehicle repossession. Under existing norms, finance companies must follow due legal process while recovering financed assets and cannot permit coercive seizure by unauthorised individuals.

Any use of force, intimidation or unlawful repossession falls outside regulated recovery procedures and may attract criminal liability. The latest case is likely to draw scrutiny from regulators and law enforcement over informal recovery arrangements and borrower data handling.

Probe Expands Further

Police said the investigation is now focused on identifying the full network behind the finance company vehicle seizure racket, including those who supplied borrower data and enabled illegal recoveries.Officials are also examining whether similar incidents have taken place in other parts of the city.