Digitisation of banking services makes it very convenient for everyone to apply for a loan or a credit card online. This is a time-saving practice, which is also more convenient as compared to the traditional method of applying at the bank branch.
However, with the dawn of digital applications, the risk of fraud has also increased. Here are some common types of instant loan and credit card fraud and how to identify them. Read on to know how the OneScore App helps you to stay vigilant and detect fraud in your name for free.
How to Detect Loan and Credit Fraud
- Phishing
The most commonly found tactic is when scammers forge the identity of a financial institution. In their communication, they will pretend to be a well-known bank or NBFC offering a pre-approved loan or credit card.
An easy method to differentiate communication from an official bank is to check how they address you. Only if you are an existing customer will you get a pre-approved offer. In this case, the bank will address you by your name and not vague nouns like ‘dear customer’ or ‘user’.
In addition, check the email address from which you have received this email. If it doesn’t have the official name of the bank, it may be a scam. The idea of phishing is to get you to share your personal data, which scammers misuse to take a loan or credit card in your name.
- Skimming
Another common scam is when the scammer steals your card details through a physical device. This is commonly done at the PoS stations or at the ATM. Using your credit card number, expiry date and CVV number, they can make fraudulent transactions or duplicate the card. To detect this, check if the machine has any additional chips or attachments. Better yet, use the tap-and-pay option offered by modern cards instead.
- Enticing Offers
Another scamming practice is to give a very attractive offer, which may be hard to refuse. Generally, scammers choose individuals who are new to borrowing, in urgent need or don’t meet the eligibility criteria for banks. Such a vulnerable population in need of money may be more gullible. To identify such scams, look for offers related to zero or very low interest or no income proof.
- Lack of Physical Address
Another way to detect scams is to look for the official address of the financial institution. To make them untraceable, scammers often don’t mention any address or contact details on their platform.
If you find such critical information missing on the app or website, you may be dealing with a fraudster. Similarly, if there is a lack of digital presence, such as social media accounts and official websites, it may also be a warning sign.
- Unsecured Websites
Con artists aim to make as low an investment as they can. Therefore, it is very unlikely that they will invest in creating a secure website. You can look for the security features on a web page to identify a scammer. Similarly, if the personal loan app has a very simple interface and no mention of security features, it is unsafe to save any of your personal or card details.
- Time-Crunch Tactics
Scammers often create a sense of urgency so that you do not get enough time to check all the details or charges. A reliable lender or credit card company will never rush you into completing the process. In fact, they will suggest you make an informed decision and read the terms carefully. If you feel like you are being forced to act soon, it may be a scam.
- Approval Without Credit Check
The biggest red flag is when a lender or credit card company offers funds without any credit score check. Since your 3-digit credit score is proof of your credit management ability and repayment capacity, no trustworthy financial institution will skip this step.
- Unsolicited Offers
Most banks and financial institutions only give pre-approved offers to their existing customers if they have a good credit record. If you are not a customer, it is less likely that you will get an offer from a dependable lender unless you have made an inquiry.
- Missing Fees and ChargesÂ
Transparency is the best highlighting feature of a responsible lender or credit card company. If they don’t mention the terms, fees and charges on their platform, they are not to be trusted.
- Unsecure Communication
Channel of communication is also a great indicator of the reliability of the instant loan or credit card issuer. Unless the bank is reaching out through email, an officially registered mobile number, or through the post, it’s risky to respond.
How to Report Them
If you ever encounter such scams, calls, or emails, you can report it to the National Cybercrime Reporting Portal (NCRP). In case you notice any fraudulent loans or credit cards in your name, the right action is to report it to the credit bureau to avoid any further damage to your credit score. you should also report it to the lender or credit card company.
With OneScore, you can easily report any unauthorised loans in your name to the CIBIL and Experian credit bureaus in just a few minutes. This helps you take instant action and avoid authorised loans or credit cards from damaging your credit score and holding you financially liable.
With the OneScore App, you can do much more than spot and report fraud. You can also check your credit score and generate free credit reports across your lifetime! What’s more, you can boost your score by following custom tips based on your unique use of credit. This helps you get a more affordable personal loan in the future.
In fact, once your score reaches 730 and above, you can also apply for a OnePL instant loan of up to ₹5 lakhs and more on the OneScore App. Enjoy an easy application process without any additional documents. You can get an affordable interest rate starting at 12.5% p.a., swift disbursal and comfortable repayment of up to 2 years. Download OneScore to get an instant loan and take care of your credit health today!
Also Read: Cheap Loans: Affordable Borrowing Solutions for Every Budget
