Loan scams: Here's how you can prevent losses by identifying fake advertisements, websites, and emails.
Cyber fraud: Fraudulent loan advertisements have become a growing concern in the financial industry, targeting individuals facing financial difficulties. These deceptive ads promise quick and hassle-free loans without paperwork or credit checks. However, they often come with exorbitant interest rates and hidden fees, leaving borrowers in even deeper financial trouble. It's crucial for loan-seekers to recognize the red flags associated with fraud loan ads to safeguard themselves.
According to a booklet by the Reserve Bank of India (RBI) on the modus operandi of financial fraudsters in the non-banking financial company (NBFC) space, scammers issue counterfeit advertisements offering personal loans at incredibly attractive and low interest rates, easy repayment options, and without collateral or security requirements.
Here are some tactics used by fraudsters, as outlined in the booklet:
1. Fraudsters send emails posing as senior officials from well-known/genuine NBFCs, creating an illusion of credibility.
2. Borrowers who approach these fraudsters for loans are tricked into paying various upfront charges such as processing fees, Goods and Services Tax (GST), intercity charges, advance Equated Monthly Installments (EMI), etc. 3. The fraudsters then vanish without providing the promised loan amount.
3. Fraudsters create fake website links to appear in search engine results when individuals search for loan-related information.
The RBI booklet also emphasizes the following precautions:
1. Legitimate NBFCs/banks deduct the loan processing fee from the sanctioned loan amount and do not demand upfront cash payment from borrowers.
2. Never pay any processing fee in advance, as reputable NBFCs/banks do not require such fees before processing loan applications.
3. Do not make payments or provide confidential information in response to online loan offers with exceptionally low interest rates without verifying the authenticity through trusted sources.
To help you avoid falling victim to fraud loan ads, consider these tips:
1. Conduct thorough research on the lender before applying for a loan. Visit their official website and read reviews from other borrowers.
2. Exercise caution when encountering loan ads on social media or in unsolicited emails, as they are more likely to be scams.
3. Be wary of lenders who request your personal information before you've even applied for a loan, as legitimate lenders follow proper application procedures.
If you come across fraudulent loan ads, report them to the relevant authorities. File a complaint with the Cyber Crime Cell at your local police station or directly at the RBI's Sachet portal (https://sachet.rbi.org.in). Provide detailed information, including the content of the ad, website details, and any communication received.
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