How Online Loan Frauds are created


Online Loan Fraud in India:

In India, loan fraud is amongst the top banking frauds. It jumped to 90 % in FY 2019 from 55% in FY 2018. In this type of fraud, fraudsters dupe innocent people desirous of loan, by giving them false hope of providing huge amount of loan at very low rate of interest.

How to save yourself from online loan frauds?

Phishing: From phishing scam, fraudsters collect details of personal or banking information of potential target. Here are some tips to protect yourself from phishing:

  • Always pay only through secure websites starting with “https”.
  • Never share OTP or PIN with anyone.
  • Avoid transactions while you are on a call.
  • Don’t click on shortened URLs or unknown links.
  • Don’t scan un-trusted QR codes.
  • Never pay advance fee for any online loan.

Online Loan Frauds:
As per records from several banks, majority of these loan frauds come from - 

  • Fake representative or agent from reputed financial sector / Pradhan Mantri Mudra Yojna.
  • Fake identity personal loan fraud
  • Fake instant loans via SMS / WhatsApp

Modus Operandi:
Fraudster send messages to random numbers or to person desirous of such loans (collected from various sources including dark web). Then fraudsters use phishing tricks to defraud their victims as explained below:

1. Fake agents from financial sector: 
Fraudster calls, sends email or SMS and then gains the confidence on discussion. Then they ask the victim to send their details or fill in the details by clicking on the link provided by them. The victim is promised that once they shall fill in the details, they will get certificate of completion as well as scanned cheque.

Subsequently, the fraudster asks the victim to pay certain amount of support or processing fee after that they will send a cheque to their address. Fraudster also offer loan to their spouse or other family members and redo the same process.

2. Fake identity personal loan fraud:
Fraudsters use social engineering and phishing tricks to collect the documents like PAN card, Aadhaar card etc. to apply for personal loan with morphed photograph. They open bank account and maintain account until the loan is granted. Once the loan is granted the fraudster goes underground. In these type of cases, bank employees are also part of the fraud.

3. Fake instant personal loan fraud:
Fraudsters contact the victim via SMS / WhatsApp messages for instant personal loans. When the victim calls that number and asks to start the loan process, fraudster asks them to fill in certain details including OTP or UPI ID, after which the victim loses money

Signs of online loan fraud:

  • Scammer will not be serious to check your CIBIL score.
  • Lender is not registered according to government rules.
  • Lender does not provide address or contact number.
  • Demand of advance payment in the name of processing fees.
  • Lender pressurizes you to get loan done as it’s a limited offer.

How to make complaint against online loan fraud?
Cyber Cell: In almost each state, cyber cells have been set up to deal with cybercrimes. You can file complaint at your nearest cyber cell or victim can also file their complaints at www.cybercrime.gov.in (National Cyber Crime Reporting Portal). 

Local Police Station: Victim can also file FIR at their local Police Station with written complaint along with supporting documents.

By Adv Pankaj Bafna (Bafna Law Associates, Mumbai). 

Extract from Cyber-Cops.com

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