Loan lending app used to extort money: How to stay safe from scamsters
Digital lending is a growing business in India. However, there is need to exercise extreme caution since fraudsters can gain access to your personal information through fake loan apps. The point is to stay safe.
Kolkata: Fake loan apps are a menace. Fruadsters ensnare unsuspecting victims by getting access to an user’s contacts, gallery, SMS history, and phone data when these are installed, cyber crime wings caution people. Police have even said that there have been instances of scammers demand exorbitant repayments when people take loans from these apps and in case of refusal to comply with such unfair demands, they harass customers with morphed obscene images and threats of public humiliation.
Often people are in urgent need of money and they rush to take loans through digital loan apps without verifying the apps at all and many walk into such traps. According to reports, as many as 3,834 complaints were registered between January 1 and mid March this year. A survey of more than 20,000 individuals have stated that more and more people in the lower end of the financial pyramid are resorting to digital lending regularly.
Experts offer tips while downloading any loan app. The first is that one should ideally use only digital lending apps that are credible. The easiest way to identify these are the apps that are associated with the banks and NBFCs (Non-banking finance companies) which are under the ambit of the Reserve Bank of India. It must be noted that banks sometimes outsource their operation to lending service providers. Lending Service Provider, or LSP, is an intermediary which facilitates aspects of the lending process with the help of digital platforms. They work with banks and NBFCs.
Th3se entities are governed by the digital lending rules laid down by the RBI. However, they are mere facilitators and they don't handle the funds. which is done by the bank or NBFC.
Fake loan apps often charge very high rates of interest, Personal loans -- the category of loans available through digital lending apps -- usually carry high rates on interest depending on the credit score of the applicant. But if the rates are unusually high (say 30-40%) a potential borrower should avoid them.
Significantly, one should check with the website of the RBI, which has published a list of bonafide digital lending apps. Potential borrowers can easily verify whether a particular app is linked to a bank or NBFC ("regulated entity" in RBI parlance). The list has about 1,600 digital lending apps.