If you want to take a loan and are worried about fraud and scams prevalent around the world, it is recommended that you be aware of all the common frauds.
A fraud could be perpetrated by someone who promises a higher personal loan than you are eligible for, or by someone who pretends to be a bank’s agent and assures you of a good deal in return for a bribe.
To avoid falling into the traps of fraudsters, you must be aware of some of the common scams they pull on unsuspecting victims.
Common personal loan frauds
I. Promise of loan you may not be eligible for: Sometimes, you may get a false promise from a fraudster who promises a loan for which you may not be eligible, or a higher loan amount than you would be otherwise given.
II. Physical documentation: Another common practice among fraudsters is to send loan application approvals via physical documents instead of online.
There are some cases wherein fraudsters manage to convince gullible victims that they have been in touch with a genuine bank employee by showing fake documents or messages. Typically, banks and fintech platforms facilitate the loan approval process online. Therefore, when someone promises to get a loan approval via physical documents, it should ring a bell unless the process is carried out at a bank branch with the aid of a bank employee.
III. Messages sent via text/WhatsApp: Some fraudsters fleece victims by sending fake loan approval messages via text or WhatsApp, comprising messages that look very similar to the bank’s messages.
These are some of the tips which you can follow to stay safe from such loan fraud:
I. Keep agents at arm’s length: If you are looking for a loan, you should ideally approach the bank or its representative. Approaching a bank via an unauthorised agent or someone who claims to be an agent is a recipe for disaster.
II. Official communication of bank: To avoid getting duped by a fraduster, you should make sure that the loan approval came directly from the bank. Bank’s communication comes from official email ID. Even text messages sent from a bank’s official number are very explicit and one can easily find out whether it is a legit message simply by looking at the sender’s phone number.
III. Money for credit: If someone promises to give you a loan in return for money (aka bribe), you should simply refuse the offer. It is highly likely that you will not only not receive the loan money, and would also lose your hard-earned money in the process.
Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.
