Mumbai: LoanTap, a digital platform, has taken an innovative approach to raising awareness about the rise of fake loan applications and predatory lending practices. The company has launched a video campaign that played across PVR cinema screens, coupled with volunteers present to answer questions from viewers.
The move comes amid increasing reports of unsuspecting consumers being trapped by fraudulent loan apps that charge exorbitant interest rates and fees or resort to harassment and data privacy violations to recover payments. Many of these apps are not registered with the Reserve Bank of India.
The video campaign highlights the influx of SMS clickbaits and the risks of clicking unsecured links without verifying the source. It also emphasizes the importance of checking if a lender is registered with the RBI (Reserve Bank of India). The campaign exposes the modus operandi of fake lending apps - outrageous interest rates hidden in dense terms and conditions, and unauthorized access to phone contacts and data.
After the impactful videos were screened, LoanTap volunteers were stationed at cinema exits to distribute literature on spotting fake loan apps, answer questions, and guide people on taking proper legal recourse if they had already been exploited by such apps.
The rise of fake loan apps is a growing menace in India. The RBI has identified more than 600 illegal loan apps available on various app stores for Android users in 2021 alone. The government has already blocked 27 such apps, and the Google Play Store removed over 205 illegal loan apps as of November 2021.
The RBI has compiled a comprehensive booklet titled "BE(A)WARE," which provides practical information to help people safeguard themselves against fraudulent transactions. The booklet covers various fraud scenarios, including fake loan advertisements, SMS/email/call scams, OTP-based frauds, fake loan websites, and loans with forged documents. It emphasizes the importance of keeping personal and financial information confidential, being cautious about unknown calls/emails/messages, and practising due diligence during financial transactions.
"While the digital lending landscape has grown considerably, it has also given rise to illegal lending apps preying on the vulnerabilities of unsuspecting borrowers. At LoanTap, we uphold the highest ethical standards and prioritize customer protection. This awareness campaign is a crucial step in empowering individuals to recognize the warning signs of fraudulent loan apps before they fall victim to their deceptive tactics and find themselves trapped in a cycle of debt," stated LoanTap chief risk officer Rajeev Das.
