Beware Instant Loan Apps #AAHhttps://youtu.be/4Tn2gmQxqW0
There have been tragic cases where people have ended their lives due to their inability to pay back loans from these fraud apps, There have been instances that even morphed indecent videos of people were floated online to shame them into repaying loans!
Instant loan apps might be tempting, but they could come with various risks. People generally fall for such apps to avoid the hassles of a bank loan where they might need a lot of paperwork
One such fraudulent app was found to disburse unsolicited loans to users when they register and enter their KYC details. After receiving the loans, they never asked for, users are given a time limit of seven days to repay the amount. If they can’t, company executives start calling them up, threatening to harass their contacts and friends, pushing users into thorough emotional distress.
When users download an app, they usually check out the number of five-star reviews that app has on Google Play and the number of downloads it has seen. The issue is that some apps which have several 5-star reviews sometimes earn a ‘verified’ badge on the App Store or Play store. The high number of reviews and the occasional verified badges make customers believe in the legitimacy of the app, leading them to download them without concern.
However, there are certain red flags that can warn a user of a fraudulent app.
For starters, if you come across hundreds and thousands of five-star apps from users with generic-sounding names, chances are they are generated by bots. This was the case with a fraud app, which has seen over 10 lakh downloads and is rated 4.5 stars with over 50,600 reviews. But they were through bots.
“All legitimate lending apps are from or backed by lenders/banks/regulated institutions, and their names are appropriately displayed on the app and on the disclosures. So, a customer should always check who the publisher of the app is and whether they have multiple apps on the Play store, for instance,” advised Amit Das, CEO and co-founder of Think360.ai. “Customers should also check the website of the company that has published the app, and whose contact information is published as part of the app detail.”
It’s always a good idea to do proper research before dealing with loan apps. This involves verifying a platform’s registration with regulatory bodies like the RBI, SEBI, or AMFI.
“Take stock of whether the company details and registration number match; what people are behind the platform and whether they really are a registered and regulated entity. If this registration number itself is missing, that is definitely a red flag.”
“If the lender is not asking you for your credit history or is pressurising you to finalise as soon as possible, then those should be your red flags to know something is fishy,” advised LoanTap CEO Satyam Kumar. “One should be mindful of what kind of permissions they give on your phone to any app. Be careful not to approve permissions for personal data like pictures, contact addresses, and details.”
“Borrowers should carefully go through the terms and conditions and the privacy policies of a loan to make an informed decision. Key factors such as repayment schedule, charges, and default charges should never be overlooked,”
There are some simple and yet effective ways to know whether or not it’s a trustworthy app.
- The biggest red flag is not having a website. If an app does not have a website, stop right there
- Some of the websites also show a false affiliation with NBFCs. It would be prudent to check or verify the alliance.
- KYC is another way to identify false apps. If they do not follow any KYC norms or regulations, that is a sign of suspicion.
- No genuine bank or financial entity will ask for payments without the completion of the loan process.
- So, if anyone asks for payment before the loan app process, immediately walk away.
- Be mindful of what kind of permissions you give on your phone to any app. Be careful not to approve permissions for personal data like pictures, contact addresses and details.
- If the lender asks you too many irrelevant questions about your personal details instead of financial details, then know that there is something not right with the lender.
Stay Aware, Stay Safe!
Jai Hind, Jai Bharat!
PS- we have compiled several of these tips from experts/ orgs on the internet.
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