Money in bank in 24 hoursApply Now
Loan scams in India are at an all-time high as a result of the COVID-19 pandemic and increased digital activities by individuals
Putting pressure, easy money, no physical address, and no credit checks are giveaways of loan scams
Check the personal loan app’s address, website, and reviews before downloading it
Digital and technological advancements are a boon for the financial industry, but they have their own set of challenges. While on one hand, it makes banking and transacting frictionless, on the other hand, it allows people to conceal their identity, hack into accounts, hide behind the anonymity of the internet and impersonate legitimate companies to scam people. The COVID-19 pandemic further acted as a catalyst as it took the world by surprise. The financial unpreparedness to deal with the adverse situation increased the vulnerability of many. Data collected by 90 banks and financial institutions shows that 45,613 cases of loan fraud have been reported, and these are only the official ones that were brought to notice.
To deal with short-term crisis such as business losses, salary cuts, and loan repayments, vulnerable people turned to loans as a saving grace, giving way to the increasing personal loan frauds in India.
Potential borrowers must become aware of loan scams and learn how to spot them to save themselves from further financial loss and mental trauma.
The lockdown resulted in unfortunate circumstances for many due to businesses coming to a grinding halt and people losing their jobs. The need for instant loans and the need for quick money went up, and scammers piggybacked on this desperation to start duping people in dire need of money. Scammers pretend to offer an easy loan with no verification checks, impersonate legitimate company employees or dupe people through personal loan apps to siphon money off them.
A typical text would look like - ‘Dear customer! Congratulations, you are our chosen winner for a 0% interest-free loan of Rs. 5,00,000. Click on this link to avail of the offer. Offer valid for 24 hours. No documents, pre-approved loan. Claim now.’
‘Dear Ma’am/ Sir, I am writing to you from Bajaj Finance. Request you to transfer an upfront loan fee of Rs. 10,000/- to claim your interest-free loan of Rs. 3,50,000/-. Offer valid till midnight.’
The scammers act in a sophisticated manner and substantiate their claims through methods such as company letterheads, fake employee IDs, and other validation proofs such as social media profiles, eerily similar company domain names, and company logos, among others. However, certain characteristics make it very easy to spot these personal loan frauds in India.
One of the main things that should raise a huge red flag is if the person offering the loan asks for a loan fee beforehand. Please note that no legitimate lender will ask for any money upfront before disbursing a loan. If there is a processing fee, it will be adjusted in the loan amount before being credited to your account.
Any credible financial institution will check the loan eligibility and conduct a basic credit verification check. They will require complete information about your current loans and repayment history, which is critical before approving a loan. If the lender has no interest in all these checkpoints, it should raise a red flag.
A loan on a ticking clock with pressure from the lender to act urgently is yet another indicator of personal loan fraud in India. Actual lenders such as Bajaj Finance, SBI, HDFC, ICICI, and other genuine companies do not make a limited period offer and they give enough time for the individual to make a decision.
The website of the loan provider is unsecured
Easy money at shockingly low rates of interest
100% loan approval guarantee being made
No documentation requirement from your end
These days, scammers operate via personal loan apps that charge high interest rates and multiple fees without disclosing it in the first go. They have complicated terms and conditions that confuse borrowers and help siphon money off them.
You can spot a personal loan app scam if:
It is not authorised by the Reserve Bank of India or associated with any legitimate NBFC and bank
They have no interest in your financial history
The app is unverified and does not have a website
The information conceals the terms and conditions
The lender does not have an actual office address
The rate of interest is very high
To gain the credibility of customers, these unethical thieves will go to any extent to make the plan foolproof, but a checklist can help you to not fall prey to these scams.
Verify the physical office address of the lender
Do not transfer any money or fees upfront
Call the real company to check if the offer is genuine or not
If the loan sounds too good to be true, it probably is
Read the fine print of the terms and conditions
Check the lender website, reviews, and speak to people who have availed loans from there
Do not download unauthorised apps before checking reviews
If you, unfortunately, end up falling prey to these rampant loan scams, try not to panic. Lodge a detailed complaint at your nearest police station. Complain to the company they were pretending to be employees of and report the matter in detail. If it is a cyber fraud, call the cyber crime cell at 155260 or file a complaint at their website https://cybercrime.gov.in/. Share your experience with friends and family, so they stay on their guard when taking a loan.
It is sad that the current situation has been exploited by unethical people to further take advantage of the financial insecurities and unfortunate circumstances that people are going through. Helpless people and those in need of money are easy prey for these impostors as they can sniff the desperation from afar, making them a vulnerable target. No matter how unfortunate our circumstances are, it is important that we are not taken for a ride by these scammers. One should remain alert and vigilant while dealing with financial matters. The scammers may be smart, but with basic checks in place from our end, it can become very easy to outsmart them.
Read more at:
• Cautionary Note - https://www.bajajfinserv.in/cautionary-notice-new.pdf
• Infosec Page - https://www.bajajfinserv.in/infosec-pages
• Fraud Awareness Blog - https://www.bajajfinserv.in/insights/fraud-awareness
What did you dislike?
What did you dislike?
What did you like?
What did you like?
What did you like?