Online fraud loan apps are consistently increasing worldwide, especially in the Asian region. This app fraud not only robs your money but also destroys your mental peace. Many times, this fraud even inspires people to commit suicide, and some people even lose their lives.

Let’s see how these loan app frauds work and what steps one can take to avoid such mental and financial attacks. 

What is Loan App Fraud? 

There are certain apps providing instant personal and other kinds of loans with minimal documentation. All of them are not fraudulent; some apps genuinely provide you loans on legal terms. On the other hand, fraud apps provide you loans on their own terms, which are not legal or transparent. 

According to MINT about 134 fake loan applications are operating only in India.

Legal Loan Apps 

There are a number of ways to determine whether a loan app is legal or not. Firstly, legal applications have good reviews and ratings on the App Store or Play Store. Secondly, they have big celebrities as their brand ambassadors. 

These apps never lend without checking your CIBIL or other relevant scores. Most of the time, they do not approve loan applications from people with lower scores. When approved, they give you at least one month to repay. 

Fraud Loan Apps

Checking reviews and ratings on the Play Store or App Store is the best way to determine if a loan app is fraudulent. These applications do not lend you money on the basis of your CIBIL or other relevant scores. They do not have any known names or faces behind as their representative. 

Mostly, fraud loan applications take you to a processed loan right after you provide the necessary access and documents. Fraud loan apps give you only seven days to repay, and in some conditions, they start torturing you even before seven days. 

How do fraud loan applications work? 

First of all, they are frauds, and most of them have no physical identity or presence. They don’t work like a common bank or loan company. These companies make money only by scaring and threatening you.

When you register with any such fraud loan app, they ask for some permissions like location, contacts, and even gallery. They only approve loans when you provide them with all the permissions and documents. However, fraud applications do not require legal or real documents for KYC as they don’t have any right to check whether a provided document is real or fake. 

If the company gets a good amount of contact details in your phone, they will approve your loan even if your CIBIL is negative and you have not provided accurate details. 

Once the loan is approved, they start their real game. Firstly, they will change the loan amount and service charges. For example, if you have applied for or have seen a 1K loan, they will process only a 5K loan. 

Also, you will see a huge difference between the initial service charges and the updated charges. They ask for almost fifty percent of your total loan as a service or other charges. 

Start threatening 

These fraudulent finance applications start threatening you once their given period ends, sometimes even before the given period. They threaten you in multiple ways to repay the loan. However, they never provide a legitimate account or banking details to repay. 

What if repaid?

Returning their amount, asking for discounts, or talking to them about settlements can be even more dangerous. If you repay them or respond to their messages or calls, the scammers will harass you for sure. Their loan will never end, no matter how many times you repay them. 

What if not repaid?

The best way to avoid further scams is to avoid payments. Never entertain them or their alerts. They will stop contacting you within one week to 10 days. If they don’t get any response from your end, the loan applications will stop contacting you after 6 to 10 days. 

They may contact you if your file reopens again. However, after 6 to 10 days, their threatening messages, calls, and other actions will almost end. 

What actions can fraud loan apps take if you don’t repay?

They are not legally operating, and they have no support from the government or state banks, so they can not do anything legally. If you do not repay the loan taken from the fraud loan apps, they will only threaten you with legal actions; they may send your morph photos and videos to your contacts. Their recovery managers may also contact your friends and family members for recovery. 

They may use abusive words, send edited videos of you, and implement all the bad tactics to threaten you. However, they will not be capable of contacting you physically. 

In most cases, people become victims of fraud because they think that the loan company has their personal photos and videos. However, according to an employee working in the same fraud loan application company, there is no way to hack your gallery. So they cannot spread your personal photos or videos. 

Ways to avoid online loan frauds

• Never install an unknown or nontrustable app
• Always read reviews and ratings of any app you are going to install.
• Read all the T&Cs carefully before uploading your documents. 
• Do not provide access to your gallery and contact list.
• Never take a loan from applications banned by the government or are not registered with all regulatory authorities. 
• Do not trust an app without a known physical existence in the same country you live in. 
• All seven and 8-day loan apps are fraud; never trust them. 

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What if you already have taken out a loan from the fraud applications? 

Don’t worry; take a chill pill and be confident. First of all, inform all your contacts that your phone has been hacked by some foreign fraud. Let your loved ones know that the frauds can contact them and ask for money, send nude photos/videos, or humiliate you to destroy your reputation. 

You have to tell all your contacts that do not respond to such frauds to block them. Do it all before the recovery agents start sending messages and calls to your contacts. You can also launch an FIR against the app. 

If possible, turn your phone off for some days. The agents will follow you as much as you respond to them. If you do not respond to their calls or messages, they will switch to the next client, as they also have a target to meet. 

The most important thing is that you should never compromise. If you give them money once, then they will consider you an innocent victim and will ask you for money every day because, according to them, they still have your photos and contact list.

*Please note that no organization or individual can help you delete your data from the hackers’ systems. Never pay anyone for assistance. You may find some lawyers on YouTube claiming that they will help you. Don’t trust them; they are also frauds who just want to take advantage of your helplessness.

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