Easy Money in 2 Steps? A Strategy to Stay Protected From Fake Loan Apps

In the current market dynamics, money can be needed quickly, and many new startups and e-banking services offer lending services to borrowers. However, amidst all these booms in lending lurk the fake loan apps that bait these borrowers by luring them into providing money with minimal or no paperwork.

Now, for a borrower, it’s pretty enticing that in the time of need, one service can provide the required amount without much hassle. Still, this emergency is something these fake loan apps are taking advantage of and are scamming the customers.

Therefore, it becomes a serious threat to the financial security of the person who fell under the trap of the scammers. Here, a borrower needs to contact the loan agent, which can connect with genuine lenders and offer the best loan options with proper verification.

In this blog, we will look into the loan scams that one needs to be aware of and protect your personal information and other assets from falling into the hands of such fraudsters.

1. Working on Fake Loan Apps

Fake loan apps work best in an emergency where they must complete their action by luring a customer who needs immediate cash access. These apps are saviors that can help the individual get a cash loan with fewer approvals and necessary background checks.

Now, it’s the phase where you get caught in the bubble of these loan apps, and they are the ones who come with the collection process where they take the exorbitant amount from the borrower and charge a high interest on the loan amount that they offer to the borrowers.

Here is the list of steps the fraudsters follow while luring the borrowers into their nexus.

• Initial Temptation:Borrowers in this stage get enticed by the offer of easy money with no credit checks and are there for immediate approvals.
• Data Collection:These apps collect enough sensitive information once customers get in for these luring approval policies. Like bank account details, PAN details, and other access like contacts and gallery.
• Advance Fee Fraud: Some apps demand an advance fee for borrowers. If given, the scammer disappears and never gets in touch with the borrower.
• Unauthorized Deductions: In many cases, bank account access is often provided to that app for getting loan disbursal. The company takes advantage of that and gets unauthorized deductions from the bank account.
• Identity Theft: In many loan apps, these companies make real money by stealing the borrower’s identity and selling those on the dark net. After getting permission to access the phone and other details, these apps sell the data to other buyers.

2. Different Types of Loan App Scams

There are different types of loan app scams in the market and one needs to stay aware of that to protect themselves.

• Phishing for Information: Some apps are there to take all the information that is required for an identity theft to happen. Once the app gathers that information, then that can be used on the dark web.
• Traps on Instant Loan Approvals: Some apps do provide an instant loan upon using the app, but they insert some of the collection clauses, and through that, it can blackmail the borrower for repayment. In the repayment guidelines, specific clauses like high interest and exorbitant procession fees can destroy a borrower’s financial support.
• Advance Fee Scams: In the advance fee schemes, the borrower is forced to pay a certain amount of money to the app, and through that, they can get the required token amount and defraud the borrower with no further funds.

3. Red Flags to Notice For Fake Loan Apps

Several red flags are there that a borrower can notice before falling prey to such apps online. The borrower needs to check the licensing and reputation of the loan app.

If the app wants many permission requests from you, then something dubious is happening in that loan app. There are business loan agents who come as an enabler between the borrower and lender, and they are the ones who can help the borrower with the right advice and suggestions regarding the type of loan they can avail.

Staying aware in these critical cases is essential for the borrower as it allows them to stay protected from such scams and get loans from the right lender.