Beware of loan sharks! 3 bite sized hacks to avoid pesky loan scams

In the era of digitisation, financial transactions such as the application for instant loans have become remarkably seamless with the simple click of a button. However, this ease of access has led to an alarming increase in loan scams. Thus, it is crucial to stay vigilant and adhere to a detailed checklist to ensure financial safety while using instant loan apps.

Burgeoning loan scams

Despite the time-saving conveniences of the internet that allow loan transactions without extensive paperwork, such advancements have unfortunately come with increased security concerns. The Reserve Bank of India (RBI) has reported approximately 13 thousand cases of loan scams in the fiscal year 2023 across India. There has been a noticeable rise in loan frauds, with scammers commonly impersonating credible lenders and offering loans without any background or credit checks for a smooth and rapid experience.

Preventive steps to remain unscathed

One prevalent scam targets individuals with financial difficulties, particularly those saddled with dubious credit histories. Scammers send messages and links to these vulnerable individuals, claiming an approved loan. Clicking these links prompts users to allow access to their contacts, location, photos, etc., enabling the fraudsters to steal information from these unsuspecting loan applicants.

Before engaging with any loan scheme, it is critical to undertake extensive research about the potential lender. Use reviews, testimonials, and ratings from trusted sources to ascertain lender legitimacy. Do not engage with unsolicited loan offers and avoid sharing sensitive information until the lender’s legitimacy is verified. Examine loan documents rigorously and refrain from paying any fees upfront for loan approval. Staying informed and exercising caution are key in thwarting cyber fraud risks.

Reporting scams and staying safe

If you suspect a scam, document it and inform the relevant authorities. Capture clear screenshots of any pertinent interactions and compile a brief account of your encounter with the scammer. Proceed to the nearest police station or cyber cell and provide the evidence and an explanation of the incident. Additionally, you can also report online at the National Cyber Crime Reporting. Discontinue any additional exchange of information and money with the scammers and notify your bank about the situation. Considering the recency of the payment, your bank may be able to block your funds from reaching the criminals. If you’ve logged into any accounts or shared passwords during the scam, change them promptly. Fortify your online accounts using robust and distinctive passwords.

In a world where technological advancements have rendered financial transactions vulnerable to scams, adopting a careful and informed stance is essential in protecting your financial health. Ensure your financial safety and that of others by staying alert, conducting detailed research and reporting suspicious activities to the relevant authorities. Visit Livemint, the world’s fastest-growing news website, for more information. Experience a host of benefits including insightful newsletters, real-time stock tracking, breaking news and a personalised newsfeed – all just a click away.