How to protect yourself from scams with instant loans

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India’s digital credit value has increased from $ 33 billion in FY15 to $ 150 billion in FY20 and is expected to rise to the $ 350 billion mark by FY23.

The unprecedented pandemic has plunged numerous families into a financial crisis. In such situations where short term money is needed, the availability of an Instant Loan (PL) can seem like a godsend. In such scenarios of great financial hardship, people become more susceptible to scams.

Lately, scammers have been taking advantage of the COVID-19 crisis to scam people in a variety of ways, including through instant PLs. Fortunately, such instant loan scams can be easily spotted if people remain vigilant for any telltale signs. These include, among other things, advance payments, the promise of freedom from documentation and guaranteed permits. Additionally, unsuspecting loan seekers are caught up in aggressive, time-bound programs that are said to only last for a “limited time.”

Fraud marks

Often times, unscrupulous personal lenders trick naive online users into clicking links which then direct them to dubious sites. Instead of clicking the link, simply hover the cursor over the hyperlink. You will immediately see the actual site being redirected to.

A review of the site link would reveal that it was all a corrupted version from a well-known company. For example, the Citibank site can be cleverly presented as sitibank.com. This makes it clear that this is a fraudulent website and should be avoided entirely. Checking the URL could prevent you from falling into such traps.

There is now a simple and universal rule of thumb for instant PL approvals – there are never guaranteed approvals, except for scammers. For this reason, professionals fighting financial and economic crime advise instant loan seekers to beware of words like “guaranteed”.

Any so-called instant PL lender who promises money without any documentation should be scrupulously avoided. All licensed lenders must perform KYC and will ask for supporting documentation.

On unsecured websites, there are two markings used to distinguish between legitimate and fraudulent websites. A secured website always has a URL with an ‘s’ in ‘https’, which means security. Those with “http” indicate that the site is unsecured and any data on it will most likely be compromised. The second marker is a padlock icon on any page or website that requests personal information. If this symbol is missing, the site is unsecured.

Both marks are indicators of whether a website is safe from identity theft and other types of online criminal activity. So, if these are missing from a PL lender’s website, take note of it immediately and avoid any interactions with them. Absolute disregard for security protocols, especially by companies that offer monetary products or services, is a clear indication that these companies are not trustworthy.

Checks and credentials

Conversely, reliable instant lenders have security measures in place that make it difficult for cyber crooks to access customers’ confidential information. These measures also help build trust between instant lenders and customers.

In today’s scenario, customers need to be aware of scammers using phishing or tricks like “no documentation”. Phishing is a form of cybercrime in which unsuspecting victims are contacted via text message, email or phone.

For example, a scammer (or a woman!) Calls who pretends to be a representative of a reputable financial institution that offers personal loans. The fraudster then tricks the victim into revealing confidential information such as credit card details, passwords and bank details. Data obtained in this way can then be used to commit financial crimes and even identity theft.

The best way to protect yourself is to never reply to emails, messages, and calls from people or organizations you don’t know. If you are unsure and open an email or message, don’t click any links sent. Also, never download or open any attachments that could be malware or a Trojan horse.

By Gaurav Jalan, CEO & Founder – mPokket

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