Digital lending has made accessing money quite simple, straightforward, and much quicker than before. But along with the convenience comes the hazard of fake loan apps targeting unsuspecting borrowers. Loans promised with almost no paperwork and low interest rates are the scammers’ usual bait to lure their next victim. What’s next? Partial or fake transfers followed by incessant phone calls from “recovery agents” threatening action.
We analyse how this scam unfolds and help you recognise the warning signs, which are crucial to safeguarding yourself and those around you.
Modus Operandi
Easy Download, Easy Money: You install a fake app masquerading as an easy “loan app”, which you may have spotted through online ads, social media posts or even via message forwards. The app promises interest-free or low-interest loans with minimal formalities, which may appeal to those in need of urgent funds.
Permission to Invade: In addition to requesting your details, the app also requires access to your contacts, photo gallery, SMS inbox, files, and camera. It may also take a photograph of you for verification purposes.
Partial or Fake Transfers: Once all the required information has been submitted, your loan is immediately approved, and a small portion of the total amount is credited to your account. Or, a fake transfer is displayed on screen. Reported cases also reveal that money is sent to the victim’s account without their consent, trapping them.
Payback Harassment: Victims are informed that they owe a substantially inflated amount, which includes hidden processing fees and/or penalties they were not made aware of. If you refuse or delay the payment(s), the scammers blackmail you with doctored or morphed images, which they threaten to circulate to your contacts. They may also threaten to release your private chats or SMS.
Red Flags
An app demanding access to your photos, contacts, camera, location, and SMS inbox.
Promises of immediate loan approval without KYC or any other documents/paperwork.
Not revealing any processing fees or penalties to the borrower.
What To Do
Verify: Before downloading the app, check online for reviews and confirm whether the lender is registered with the Reserve Bank of India (RBI). A legitimate lender will also have an official website, along with customer support and verified email IDs.
Research: Lenders are transparent about the loan amount, interest rate, repayment terms, processing fees, and penalties. Websites and apps also feature a loan calculator and outline the eligibility criteria, as well as the required documents for loan approval.
Decline: Genuine apps do not need access to your phone to approve a loan, so deny any permissions the app might request. If you are being targeted with extortion calls, do not transfer any amount to the scammer and refrain from engaging with them.
Notify: Inform your bank of the scam to help secure your account, especially if any amount has been credited or debited.
Gather Evidence: Take screenshots of messages, call logs, along with loan approval receipts and the morphed images that can help the investigating authorities.
Report: Report the incident as soon as possible through a government portal such as Chakshu (https://sancharsaathi.gov.in/sfc/) and the national cybercrime helpline number—1930. You can also lodge a complaint with the local police station.
The Quint's Scamguard initiative aims to keep up with emerging digital scams to help you stay informed and vigilant. If you've been scammed or successfully thwarted one, then tell us your story. Contact us via WhatsApp at +919999008335 or email us at myreport@thequint.com. You can also fill out the Google form and help us take your story forward.
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