5 Industry Secrets that Online Instant Loan fraud Companies don't want you to Know:
The majority of our banking transactions have moved online due to technological advancements. One such improvement is the ability to obtain loans through several instant loans apps that offer quick loans in exchange for the uploading of appropriate documents. This post explains the five most frightening scams performed by fast loan applications. Nearly 600 fraudulent online fast loan applications were found spread across India’s play store.
1.Online Loan Apps reported to stolen and exploited personal information (Eg: Contacts, Photos, Locations etc.)
One of the most important things to note is that applications for quick loans or instant loans may ask for unnecessary permission to access contacts, file managers, and images, posing a risk that these applications will exploit the customer’s data without their consent. Furthermore, most individuals will not read the app’s terms and conditions before installing these rapid lending apps, which include rules relating to privacy, dispute resolution, and app policy. These applications use personal data for their own benefit simply by clicking ‘I Agree’ or ‘I Accept’.
2.Social Harassment & phone calls maligning the reputation of loan applicant in your friends & family after stealing the data.
Further, there have been cases where quick personal loan applications have exploited the customer’s contacts data to harass the customer by calling all of his contacts for failing one EMI. Moreover, there have been situations where these applications have exploited the customer’s personal data to negatively publicize the borrower by sending messages to all of the customer’s contacts. In this way, fraudulent quick loan applications use the customer’s personal data, which is a violation of the customer’s fundamental right to privacy, and harasses the customer’s reputation. Delhi city police have filed charges against 180 instant loan applications for defrauding and harassing their customers in last 30 days.
3.Your Cibil Score is ruined, making it difficult for you to take out loans in the future.
The instant loan applications will not update the EMI payment on time, resulting in the dues being depicted. This really frequently happens with cardholders who make the EMI payment in the last movement, which has a serious influence on the Credit scores and restricts the customers to apply for further loans like home loans, loan against property etc. Besides that, these loan applications will charge late fees to their customers ruining their cibil score significantly.
4.Online Loan Apps (most) don’t reveal hidden charges.
Nevertheless, these applications charge a higher interest rate and include other hidden charges that were not mentioned at the time of loan approval. It was recently found that approximately 30 applications charge higher interest rates than the legal limit. These applications leverage the power of a customer’s urgent need for money and twist it into a money-making opportunity. Recently, the Bengaluru cybercrime branch caught two people running a company allegedly charging high processing fees and interests for granting quick loans through a Chinese application.
5.Online Loan Apps you might be considering may not be registered as Non-Banking Financial Companies (N.B.F.C) with Reserve Bank of India & hence you might be walking straight into a fraud trap.
Lastly, the Reserve Bank of India doesn’t always register or license majority of the applications as non-banking financial institutions, which implies that these NBFCs would not be subject to RBI laws, and clients will have no appeal in cases of fraud. Before obtaining a loan approved, be sure the NBFC is registered with the RBI. ( For further information, check Manikaran Credit’s certificate of registration.)