Don’t fall prey for Instant loan frauds :
- Many of the lending apps don’t have a website and they are available only on Play Store and they provide no information/licenses about the company. At the best, there’s an email address and a phone number only. They are also called two different names, Salary Advance Loans & Instant Personal Loans.
- Considering the instant frauds of loan happening, Google Play Store doesn’t allow apps that offer loans with tenures below 60 days. Many of them had been removed from the Play Store on a policy violation. But they reappear again with different names.
- More Importantly to note that the loan dissent sanctioned without permitting the app to access your personal data (Contact, Gallery & Location) We have also seen instances of lenders sending screenshots of the victim’s communications which means they are having access to Messaging Platforms, but an established NBFC lender is less likely to access it illegally as it has a reputation to protect. Officially there are 06 deaths reported because of the aggressive recovery tactics used by the App-Based Lenders.
Modus Operandi :
- Step 1: Download the Instant Loan App from the Play Store and App Store.
- Step 2: Once the App is downloaded it demands 100% complete read access to Photographs, Phone Book and Location Services.
- Step 3: All he had to do was submit a photo ID, Aadhaar number and take a selfie / upload a photo to authenticate it’s him who’s seeking the loan from his registered mobile.
- Step 4: Electronic Authentication Completes and Loans Process Happens and Loan gets Approved. (Third-Party Authentication for Aadhar with unregistered NBFC Lenders is also illegal).
- Step 5: Loan gets sanctioned ranging from 500/- to 50000/- Instantly and Interest amount gets deducted. (For a loan of ₹ 2500, Reddy had been sanctioned ₹ 1600, and was asked to pay ₹2,500 in just one week. A staggering interest of 30 % to 50% of the principal — included interest, processing fee, and GST at 18% on that fee.
- Step 6: If the Loan is not Paid – The aggressive recovery tactics start as below just in case you are not responding / showing signs of not paying the money back.
- i) They call and abuse all the names listed on the phone (In the fake excuse of saying he has given your name as Guarantee).
- ii) Call up all numbers saved like mum, dad, spouse, brother, colleagues, and friends and start harassing them.
- iii) They will call at midnight too, They make 100 calls from different numbers in a single day.
- iv) Add in Adult WhatsApp Groups and Post victims morphed photos and other obscene photos and videos to all family members of the victim.
- v) They will send fake FIR / Fake Lawyer Notices.
- vi) They will threaten you saying your CIBIL Score will be zero (You may never get a loan in a future life) and your PAN and Bank will seize for good.
- vii) Many times the lenders call the number listed on your phone asking them to pay the dues telling them that that person is listed as a guarantee for the loan taken.
- viii)They list your name as Male / Female Escorts.
- ix) If you are a female victim they might ask you to send a nude photograph for loan waiver and later use this for collection of dues.
Vicious Circle :
- Even if they are one day late, they will pressurise the victim to repay the loan in just 05 minutes and they offer another loan for the repayment to be made for the existing loan. They get SMS as soon as they hang up the current call. As per analysis with talking to over 28+ victims we understood that unable to bear the pressure the victims are forced to take over 25+ Loans from different Instant Loan Apps to clear the past dues and this vicious circle goes on and on.
Warning Signs of Instant Loan Frauds :
- Credit check not required: The lender will not bother to check the Experian or CIBIL Credit Check Scores and will put more focus on knowing personal details.
- Lender is not registered with Government: To continue in the lending business, lenders are required to register with the RBI as an approved NBFC Lender.
- Non Existence of Physical Address: Lender not providing a physical address or contact information, then immediately stop contact and do not go ahead with any loan offers.
- Advance Payments: Fake Lenders might demand advance payment or fees in the name of GST fees or processing fees.
- Loan Offer Expires in a Few Hours or Days: Scammers come up with limited period offers and ask applicants to make decisions almost instantaneously using scareware or tempting tactics, saying the offer expires soon. Any reputed banker will offer interest rates and loan amounts only after evaluating your CIBIL credit history.
What to check when applying for an Instant Loans – Remarks :
- It must have Reserve Bank of India’s (RBI’s) mobile-only Non-Banking Financial Company (NBFC) license which allows them to give you that loan.
- Check for contact information. A lender’s phone number, email address, and physical address should be readily available on the website / mobile app, even if it’s an online-only lender.
- Look at the various professional websites that review various loan apps from time to time, it is the easiest way to find out if a lender is trustworthy.
- Lender should send you the Loan Sanction Letter, Copy of the Agreement & EMI Amortisation schedule, in 99.9% of the cases online instant app-based lender don’t provide these documents.
- Fees collected should be Processing fee (not greater than 1% of the loan) + Stamp Duty, DD Charges, and GST on the deducted amount.
- Think 100 times before you give access to network, contacts, device, gallery, and location to any of the Apps on your smartphone.
Suggestion for Victims :
- Don’t be ashamed, Immediately File a complaint online on www.cybercrime.gov.in or alternatively reach the nearest cyber crime police station to file a physical complaint. The most important thing not to forget to do is, write a small message saying that you are in the midst of instant loan fraud and send it to all the listed members of your phone contact requesting them to ignore any messages that they receive.