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Common Loan Scams to Be Wary of in 2021

  • Highlights

  • Loan scams and phishing attempts have become all too common these days in the wake of going digital being the new norm

  • It is important to remember that no bank employee or trusted NBFC will ask for an advance fee or a deposit to extend a loan

“Zero documentation. Loan processing within 2 hours. The offer expires in 20 minutes. Apply now.”
Sounds attractive, doesn’t it? The bitter truth is that most of these schemes are loan scams. Digital banking, online financial transactions, internet-based lending have become all too common. These are being promoted both for the sake of customer convenience and for the inclusion of the masses in the mainstream economy. This, unfortunately, has also given rise to several phishing and vishing attacks, online scams, and loan scams.

Common Loan Scams

With the COVID-19 pandemic affecting many small and medium business enterprises, employment, and families across the country, the demand for loans is now at an all-time high. This means that more people are currently seeking loans than ever before. Some are looking to finance personal and medical needs, then there are those seeking educational loans, and others may be looking to start a business. Whatever the reason, these people are vulnerable to loan scams. Let us look at how some of these scams work.

 

  1. Advance-fee loan scams: One of the top phishing scams of 2021 comes masked as a loan offer, usually with no requirements of documentation, credit checks, or any of the precautions that banks and reputed NBFCs take before making a loan offer. These do sound attractive enough. The scammer makes an offering and asks you to make an advance payment, usually in the form of the pretext of a processing fee that needs to be deposited with the application. The scammer may even pretend to be from a reputed financial company such as Bajaj Finserv. Even after paying the fee, loan doesn’t get sanctioned.

  2. Loan scams through social media: Another common loan scam involves a very attractive social media advertisement that will prompt you to click a link and enter your bank account number, date of birth, personal details, and even your login credentials. This information is subsequently used to defraud you and hack into your account.

  3. Debt settlement loan scams – If you have already taken a loan from a trusted bank or NBFC, you may receive a call from a scammer promising you foreclosure and settlement of the entire debt amount in exchange for a small fee. This could be a scam. Most banks and NBFCs prefer not to go for a premature settlement.

  4. Fake website loan scams – A social media advertisement or an email advertisement leads you to a website that looks like a bank or NBFC website at the first glance. Then you realise that the name is misspelled (for example, Bajaj Finserv is spelled as BjajFnserv) and there are other subtle errors. This is an indication that you have landed on a fake site.

  5.  

Always Remember:

  • RBI authorised banks and trusted NBFCs will never ask for an advance payment on a loan

  • Genuine lenders will need to verify your credit score, income proof, PAN, etc., before agreeing to sanction a loan

  • No legal bank or NBFC will ask you for your personal or financial information through social media applications. Your data simply isn’t safe on social media

  • Calls from personal numbers asking you to sign up for loans must ring an alarm bell

  • Poorly drafted emails, texts, websites that spell the brand wrong, and have different logos are all indicative of a phishing or vishing attack

What to do if you fall for a loan scam?

Despite our best precautions, we may sometimes fall victim to ruthless scammers. If you think you have fallen prey to a loan scam, it is important to take immediate action. Register an FIR at your local police station.
If you have fallen prey to a phishing or vishing scam or a digital fraud, register a complaint on the cybercrime portal https://cybercrime.gov.in/. If you have been receiving calls impersonating Bajaj Finserv employees asking you to take loans against advance fees, reach out at https://www.bajajfinserv.in/reach-us.

Savdhaan Rahein. Safe Rahein.

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

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