Digital advancement is helpful for the financial industry, but at the same time, they have its own set of challenges. You can make quick payments and get notified, but with that, there is also the risk of hacking and fraud involved.
During the pandemic, people witnessed a surge in personal loan fraud. Hackers have been misusing the usage of digital technology to scam people and steal their money. It is vital to understand ways to identify personal loan fraud to avoid it altogether.
5 Best Ways to Identify Personal Loan Scams
1. The refundable money experience
One of the biggest red flags to spot in order to avoid personal loan fraud is to see if the scammer is talking about the refundable processing fee with an easy loan exchange. Financial institutes will never ask you to pay money in advance in exchange for reimbursement later. The processing fee is adjusted with the loan amount, so if payment of advance money is involved, then understand that it is not a legit offer.
2. Unpopular company name
Always check the company’s background if you are applying for a loan. Do not accept any offer if you feel the company name is unfamiliar. The financial companies have official websites that can help you understand fraud traps, so research the unfamiliar company names and then take up the offer.
3. Creating a sense of urgency
If the lender makes it sound urgent to take up the loan, then it is another red flag for personal loan fraud in India. Legit financial companies do not put a time limit on loan offers as they give enough time for the person to decide whether to take the offer.
4. Guaranteed loan approval
Stay away from companies with the tagline ‘Guaranteed loan approval’. There is no such thing as guaranteed loan approval. The approval of your loan depends on various factors like credit history, steady income, personal information, other loan applications, and much more. The financial institute will do a thorough background check before passing the loan approval.
5. Unsolicited communication
The fraud companies tend to send Whatsapp messages, SMS, and emails and also make calls to get instant cash from people. The messages and emails can make you believe in the company’s legitimacy, but it is their way of making people believe.
Make sure to never give your personal information through messages and over calls because there is a huge possibility that there is a fraud company on the other side. They try to look legit and extract information from the customers to scam them and steal money.
Stay alert and aware if you feel that you are involved in a situation with a fraud company. Make sure never to share personal information through messages or calls. If you are making financial transactions, deal with reputed financial institutes to avoid such situations altogether.
If you come across anything similar to this situation, file a complaint on the Cyber Crime website and alert your bank about the same.