How to Identify and Avoid Fraudulent Lending Apps

In the age of digital convenience, instant credit is just a tap away. However, as legitimate lending apps flourish, so do fraudulent ones, preying on unsuspecting users. With a plethora of applications available on online mobile-app stores, it is easy to fall prey to fake lending apps without adequate financial literacy. Read this article to the end to learn how to distinguish between a genuine and phoney lending app and safeguard yourself from loan fraud. 

5 Tips to Spot a Fraud Loan App

Fake loan apps often mimic the appearance of authentic digital lending applications. Some even use names of genuine loan apps, making them hard to identify. However, subtle differences set apart fraud loan apps from genuine lending apps. Here are some essential aspects to look out for to identify fraudulent apps. 

Negative online reviews
User reviews on online app stores provide first-hand insight into the past user experience. Applications that have lower ratings or too many negative reviews may be fraudulent. Any user who has fallen prey to a fake app or loan scam before is likely to leave a review as a warning to others. It is good practice to go through the reviews section before downloading any lending app. 

Asking for advance fees
Fraud loan apps often demand payment of advance fees, promising faster processing or guaranteed approval in return. Once you pay, they vanish or curb all communication channels. Never fall prey to such demands without appropriately verifying the authenticity of the loan app. 

Lack of RBI registration
A list of registered Non-Banking Financial Companies (NBFCs) and Asset Reconstruction Companies (ARCs) is available on the official website of the Reserve Bank of India. Conversely, you can also scrutinize loan apps and their official website for such affiliations. The absence of any such compliance indicates that the app may be fraudulent. 

No Physical Address or Contact Information
Fraudulent lending apps often operate without a physical address, such as a registered office address or customer support number. Always look for such information on lending apps and their websites to verify their authenticity. 

Non-Secure Website or App
Digital lending institutions ideally deploy data security measures to safeguard user information. These include application and website security protocols. Ensure adequate security before entering your personal information in online loan applications. 

How to Protect Yourself from Fake Loan App Scams

Identifying fake lending apps is the first step to protect yourself from online loan fraud. However, following certain best practices is critical to safeguarding yourself from grave consequences such as identity theft and monetary losses. 

Download from trusted sources
The first line of defence is to use trusted sources to download any digital lending application. This is because official app stores deploy security measures to detect and remove fraudulent applications. Never download any application by clicking on links or from questionable websites. 

Avoid phishing calls, SMS or emails
Scammers resort to phishing to hide their original identity and clickbait users into clicking on malicious links. Never click on any link sent from suspicious mobile numbers or email addresses. Additionally, always refrain from clicking on advertisements with absurd offers.

Safeguard your personal information
Authentic lending applications will only ask you for relevant information related to your loan application. Ideally, genuine lenders require your KYC details and proof of income. Only submit your personal information if the application appears to be reliable. 

Use a secure internet connection
An unsecured internet connection is a technical loophole that scammers can use to steal personal information. Since it requires specific technical expertise to identify such loopholes, it is better to ensure that you are using a secure internet connection. 

Report suspicious apps
Reporting a suspicious app prompts online app stores to review their authenticity and de-list them, thereby preventing further scams. If you are already a victim of an attempted loan scam, stop all communications with the scammer and file an official report with relevant government authorities.

Online Lending App – Dos and Don’ts

Even with advancements in cyber security, scammers come up with new designs to defraud potential loan seekers every day. Here is a quick checklist to follow when looking to borrow from a digital lending app. 

Dos	Don’ts
Download apps from registered sources only	Don’t click on suspicious links from unknown senders
Use a secure internet connection	Don’t download apps from untrustworthy websites
Verify lending partners and/or RBI licensing	Don’t pay advance fees without verifying
Read user reviews and check app ratings	Never share irrelevant personal information
Look out for the lender’s secure website	Stay away from too-good-to-be-true offers
Ensure that the app provides data encryption	Don’t use untrusted networks for financial transactions
Check for Privacy Policies, Terms & Conditions, etc.	Never provide irrelevant app permissions

 

Why Poonawalla Fincorp Is Your Most Trusted Loan App 

With so many digital lending apps crowding on official mobile app stores, it is easy to get confused and click on fraudulent loan apps. However, as your most trusted financial partner, Poonawalla Fincorp ensures that your fund needs are met without hassle while providing end-to-end protection for your personal information.

 Here are a few green flags that make Poonawalla Fincorp a reliable digital lending platform for all your financing needs. 

•    Poonawalla Fincorp has physical branches all over India, with a registered office in Pune and corporate headquarters in Mumbai, Maharashtra. 
•    Poonawalla Fincorp is an RBI-registered NBFC whose details are available on the official website.
•    Poonawalla Fincorp has been recognized as the "Best BFSI Brand 2024", apart from various other awards and accolades. 
•    The Poonawalla Fincorp mobile app is available for download ONLY from the official Google Play Store and Apple App Store platforms. 
•    The detailed Privacy Policy of Poonawalla Fincorp is available for users on the official mobile app. 
•    You can reach out to Poonawalla Fincorp on the toll-free number 1800-266-3201 or write an email to customercare@poonawallafincorp.com.

To Conclude

Downloading and engaging with fraudulent lending apps can lead to substantial monetary losses and even personal data theft. Common red flags, such as non-compliance with RBI regulations, lack of a secure website and physical addresses, etc., are the first signs to identify a fake loan app. Using a secure internet connection and downloading apps only from trusted sources are some of the best practices for safeguarding yourself from online loan fraud. 
As an RBI-licensed NBFC, Poonawalla Fincorp is committed to being your most trusted financial services brand with personalised loan offerings. Download the app from the official Google Play and Apple App Store and enjoy a secure borrowing experience for all your financing needs.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply