Pakistan’s cybercrime authorities arrested 39 suspects, including a woman, following a raid on an alleged illegal call centre in Lahore accused of using artificial intelligence (AI) to generate explicit images of borrowers who failed to repay loans. According to investigators, the operation involved several instant loan applications, including Gurbat Fund, Jahez Fund, Cash Air, Credit Check, and Credit Support, which allegedly accessed users’ photo galleries and contact lists. When borrowers missed payments, employees reportedly manipulated their photographs using AI tools to create sexually explicit images and threatened to distribute them among family members and contacts unless payments were made. Authorities seized 40 laptops and 41 mobile phones for forensic examination and are investigating potential international connections. The case highlights growing concerns surrounding AI-enabled image-based abuse, predatory digital lending practices, data privacy violations, and the exploitation of personal information for financial coercion.