Kolkata man loses ₹3.8 lakh in loan fraud — 5 key money lessons to stay safe from financial scams

A loan scam took place in New Town, Kolkata, as detailed in a recent report by The Telegraph. The victim, Golak Mondal, was contacted by scamsters posing as officials from a non-banking financial company. He was assured of a personal loan of ₹20 lakh by them.

After agreeing to their claims and assurances, he shared his critical personal documents with them to facilitate the completion of the loan processing. Later, he was asked to pay a substantial processing fee of ₹3.8 lakh. According to the fraudsters, this was the final step in processing the loan amount.

Still, after following all these steps and making the payment, the fraudsters completely stopped all forms of communication and ignored Mondal's calls. This left him dejected and defrauded. Following this, a complaint was lodged with the Bidhannagar City Police, and the case is now under investigation.

With the advancement in digital technology, the methods of carrying out digital scams are also evolving rapidly. In such scams, fraudsters exploit the greed of victims and win their trust by offering fake and fabricated personal loan deals, offers and schemes.

This is done by impersonating legitimate financial institutions. To help future loan applicants and aspiring borrowers avoid falling victim to such fraud, let's examine several important lessons.

Five key lessons to help borrowers avoid falling victim to loan fraud

1. Verify the authenticity of the lending institution: Before agreeing to any particular loan, ensure that you check the identity of the loan provider and its regulatory backing. This should be done by contacting the official customer service platforms and thoroughly reviewing recent customer reviews of the financial institution.
2. Avoid upfront payments: Legitimate lending institutions never ask for processing fees, loan clearance charges or any other associated fees separately before clearing personal loan applications. That is why it is always best to keep in mind that paying any upfront fee is a clear red flag and must be carefully scrutinised.
3. Conduct thorough research on loan offers: Before agreeing to any specific loan, verify the lending institution's official website for accurate information. Not only this, but also check several other similar competitor websites and write down the pros and cons, applicable interest rates, and recent reviews before blindly agreeing to any particular personal loan. The borrowing decision should not be an emotional one but a rational step. Never respond to unsolicited loan offers.
4. Protect your personal information: Never share your critical personal information with anyone irresponsibly. Your Aadhaar Card number, PAN details, bank account number, ATM card details, or any OTP should all be protected and never shared with anyone. Fraudsters use the personal details of victims to commit financial crimes and cause harm.
5. Monitor all forms of communication and payments: You must stay vigilant about calls, messages, emails and any other form of communication related to your personal loan applications. If you have any doubts, quickly raise the issue with your nearest police station or on the national cybercrime reporting portal in case you are faced with any similar digital scam: https://cybercrime.gov.in/

Remaining cautious and informed about recent banking developments, changes in rules and regulations, and consistent advisories issued by regulators on protecting oneself from financial scams can significantly reduce the risk of such personal loan frauds and protect a person's financial integrity.

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