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Business News/ Money / Personal Finance/  Personal Loan Scams: Beware of loan sharks! 3 bite-sized hacks to avoid frauds

Personal Loan Scams: Beware of loan sharks! 3 bite-sized hacks to avoid frauds

Personal Loan Scams: Financial transactions have become streamlined with the rise of instant loan apps, but this has also led to an increase in loan scams. It is important to be vigilant and follow a comprehensive checklist to protect your financial security.

Personal Loan Scams: The ease of access to instant loan apps has resulted in a surge in loan scams.Premium
Personal Loan Scams: The ease of access to instant loan apps has resulted in a surge in loan scams.

Personal Loan Scams: The ease of access to loans has led to an alarming surge in loan scams. It is important to adopt a vigilant approach and follow a comprehensive checklist to safeguard your financial security when using instant loan apps.

Loan scams on the rise

The advent of the internet has undeniably simplified transactions, eliminating the need for extensive paperwork in the loan application process. Nevertheless, this newfound convenience comes at the expense of heightened security risks. The Reserve Bank of India (RBI) reported around 13 thousand bank fraud cases across India in fiscal year 2023. 

Loan frauds have become increasingly prevalent, with scammers often impersonating reputable lenders. These fraudulent operators promise a hassle-free experience and quick funds without conducting background checks or scrutinising credit history.

Essential measures to avoid falling victim

A common scam targets individuals facing financial challenges, particularly those struggling to secure loans due to unfavourable credit histories. In this scheme, scammers send messages and links to vulnerable individuals, claiming that a loan has been approved for them. Upon clicking the link, users are prompted to grant access to their contacts, gallery, location, and more. This ploy allows fraudsters to take information from the devices of unsuspecting loan seekers.

Preventive measure 

Thorough research: Before engaging in any kind of loan scheme, conduct in-depth research on any potential lender. Rely on reviews, testimonials, and ratings from reputable sources to verify the legitimacy of the lender before proceeding.

Identifying scams: Be cautious of unsolicited loan offers via email, text, or phone. Only engage with well-known financial institutions and avoid sharing sensitive information until the legitimacy of the lender is confirmed.

Stay informed: Verify the authenticity of lenders, scrutinise loan documents, and refrain from paying upfront fees for loan approval. Staying informed and exercising caution are essential to mitigating the risks associated with cyber fraud.

How to report a scam and stay protected?

Report to Authorities: If you suspect a scam, report it to the relevant authorities. Capture evidence by taking clear screenshots of any relevant evidence, such as messages or website interactions. Compile a brief of how you came into contact with the alleged person or website and detailing the subsequent fraud activities. Head to the nearest police station or cyber cell, providing them with the evidence and a concise explanation of the incident. 

Additionally, for online reporting, visit the National Cyber Crime Reporting Portal. Refrain from providing additional information or money to the scammers and cease communication with them.

Contact your bank: Inform your bank about the situation, and if the payment is recent, they may freeze your funds before they reach the criminals.

Change passwords: If you've logged into accounts during the scam or provided passwords, change them immediately. Make your online accounts safer by creating passwords that are both strong and unique.

In an interconnected world, where financial transactions are seamless yet susceptible to scams, adopting a cautious and informed approach is crucial to protecting your financial well-being. Stay vigilant, conduct thorough research, and report any suspicious activities to relevant authorities to ensure a secure financial environment for yourself and others.

Akshay Mehrotra, Co founder & CEO, Fibe


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Published: 04 Jan 2024, 01:56 PM IST
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