The internet has proliferated with fake lending apps that might seem promising at first but only exist to dupe customers. Recognising a fake loan app isn't always easy, but staying alert can save you from a financial nightmare. Scammers make these apps look like real lending apps by using catchy names, flashy ads, celebrity faces, domain names, and even reviews to seem trustworthy.
They lure credit seekers in with instant approvals and unbelievable offers, only to exploit their data and money. Therefore, being vigilant is the key, especially in times of financial emergency. In this blog, we highlight crucial guidelines to help you recognise and protect yourself against a fake loan app.
To avoid falling for a financial trap, here are 5 ways you can identify a fake loan app:
First and foremost, legitimate lending apps are registered and regulated by authorities such as the RBI. Before using a loan app, verify its regulatory status and check for legitimacy. You can find information about the app online through reviews and look out for a ‘fake loan app list’.
An absence of a registered approval as a partner from an NBFC is a significant red flag. Oftentimes, fake apps involve unauthorised third-party lenders whose fraudulent ads appear on gambling or news websites, with hidden fees or illegal debt-collection tactics.
If the website or app interface is flooded with offers and lacks professionalism, beware — it may be a fake loan app. A few checklist items to consider are spelling or grammatical errors, a lack of context in navigational options, and an unprofessional interface layout. Check out the app's reviews and downloads on Google Play or App Store. Also, check the domain name.
Additionally, when browsing a website, look for SSL certification and ‘https’ at the beginning of the URL. If the website lacks these crucial touchpoints, it is insecure, and your sensitive password may be trapped in the hands of potential scammers.
If a piece of bizarre contact information leaves you guessing the source of originality, understand that they are likely to mislead you with the fake information. A legitimate loan app will always provide real contact details, physical addresses, and email addresses, whereas a fake loan app won’t be prepared to give you all their information.
Moreover, if lending apps ask for data beyond what’s relevant to a loan application, be prepared not to provide it. Before allowing the app to access all your personal information, verify its physical address, email address, or customer service number from reputable independent sources to check its legitimacy.
A big red flag when spotting a fake loan app is when they request upfront fees to proceed to the next steps in your loan application. If they demand payment before providing services or ask you to provide personal or financial information irrelevant to the subject, consider it a scam.
Legitimate lending apps provide clear and detailed terms and information, including interest rates, fees, and repayment schedules.
Fake lending apps may use high-pressure tactics to lure you into making a weak decision. Scammers usually provide proposals that seem too good to be true, such as extremely low interest rates, guaranteed loan approval in minutes, or no credit checks.
On the contrary, recognised lenders give you time to decide and review terms and conditions and conduct a financial background check to ensure your credibility as a borrower for an easy loan repayment process.
Now you know how to spot a fake app, but you still can get scammed by unauthorised apps. Below are 3 tips that will help you protect yourself from getting scammed:
Share the necessary documents, information, and data. Genuine money lending apps always ask for KYC (Know Your Customer) and are connected to authorised banks and NBFCs. Don't give sensitive information to apps that request it without justification.
If you encounter a suspicious or fake loan app, they can lure you into personal loans and business loans and report it to the relevant authorities, such as the RBI or consumer protection agencies. Reporting helps protect yourself and others from falling into scams and helps the government take action against them.
It's a good practise to check all bank messages and ignore spam messages. Notify your bank of any unauthorised transactions immediately. Remember, precaution is always better than cure.
Early detection can prevent significant financial loss. If an offer seems unusually attractive, don't get excited; check the website; it’s likely a scam. Set up SMS alerts and check frequently to spot unusual activity and protect your finances.
Fake lending apps and websites don't follow RBI regulations. The RBI frequently publishes a list of registered NBFCs (Non-Banking Financial Companies) and banks that can legally offer loans.
Check whether a particular app is mentioned on the NBFC’s website. Platforms like Quid offer lending services, such as a personal loan, from RBI-approved NBFCs, where your entire loan application process is secured.
A fake loan app will deceive users with false promises and misuse personal data for unethical practices, which can lead you to be one of the victims. Many impose hidden fees and unauthorised deductions or even harass borrowers through aggressive collection tactics by blackmailing, spamming, and threatening.
By following the steps outlined above, you can significantly reduce the risk of falling victim to fraudulent lending schemes. Again, staying vigilant is paramount – which you do so by staying updated with the latest blogs from Quid.
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