How to stay safe from Instant Personal Loan scams

The unprecedented pandemic has pushed numerous families into financial crisis. In such situations, when money is required at short notice, availability of an instant personal loan (PL) can seem like a godsend. It is in such scenarios of dire financial need that people become more vulnerable to scams.

Recently, scamsters have been using the COVID-19 crisis to cheat people in various ways, including via instant PLs. Fortunately, such instant personal loan scams can be detected easily if people stay vigilant against tell-tale signs. Some of these include demands for advance payments, a promise of no documentation and guaranteed approvals. Besides, unsuspecting loan seekers are snared by aggressive time-bound schemes supposedly for a ‘limited period only’.

Fraud Markers

Often, unscrupulous personal loan lenders induce naïve online users into clicking on links that then redirect them to dubious sites. Instead of clicking on the link, one should simply keep the cursor hovering over the hyperlink. Instantly, it will reveal the actual site to which one will be redirected.

Scrutiny of the site link would reveal that it is invariably a corrupted version of a well-known firm. For instance, the Citibank site may be cleverly represented as sitibank.com. This makes it clear it is a fraudulent site to be completely avoided. Here, checking the URL could prevent one from falling into such traps.

Meanwhile, one simple and universal thumb rule for instant PL approvals – there are never any guaranteed approvals, except fraudsters. This is why professionals fighting financial and white-collar crimes advise instant personal loan seekers to beware of words such as ‘guaranteed’.

Any so-called instant PL lender promising money without any documentation should be scrupulously avoided. All licensed lenders are required to undertake KYC and will ask for accompanying documentation.

With unsecured websites, there are two markers to differentiate between legitimate and fraudulent ones. A secured website will always have a URL with ‘s’ in ‘https’, which denotes security. Those with ‘http’ indicate the site is unsecured and any data here is most likely to be compromised. The second marker is a padlock symbol on any page or site soliciting personal information. If this symbol is missing, the site is unsecured.

Both markers are indicators of whether a site is safe from identity theft and other types of online criminal activity. Therefore, if these are absent in any PL lender’s website, take immediate notice and avoid any interactions with them. The absolute disregard for safety protocols, particularly from firms offering monetary products or services, is a clear indication that these entities are untrustworthy.

Checks and Credentials

Conversely, reliable instant PL lenders have such security measures in place, making it difficult for cyber crooks to access customers’ confidential information. These measures also help in building trust between instant PL lenders and customers.

In today’s scenario, customers need to be aware of fraudsters using phishing or ploys such as ‘no documentation’. Coming to phishing, this is a form of cybercrime where unsuspecting victims are contacted through SMS, emails or phone calls.

For instance, a conman (or woman!) will call, posing as a representative of a renowned financial institution offering personal loans. The fraudster will then trick the victim into disclosing confidential data such as credit card details, passwords and banking information. Data procured in this manner can then be used in committing financial crimes and even identity theft.

The best way to safeguard oneself is to never respond to emails, messages and calls from unknown persons or organisations. If one is unsure and opens an email or message, do not click on any links sent. Also, never download or open any attachments, which could be malware or a Trojan horse.

By Gaurav Jalan, CEO & Founder – mPokket