How to Remain Watchful of Fake Lending Apps?

Of late, a lot of lending apps have flourished, enticing people with small loans. However, a few of these apps are dubious in their dealing and could lead to compromising an individual’s financial data and privacy with the intent to dupe. 

Individuals need to be sure before downloading any such lending app to ensure that they don’t fall for the trap. 

In this regard, before going in for a loan from a lending app, it is pertinent to ensure the following things:

Affiliation to Non-Banking Financial Company (NBFC): It is quite important to check which NBFC the app belongs to. The list of NBFCs is available on the Reserve Bank of India’s (RBI’s) official website.

Be watchful of the claims: It is important to cross-verify the claims made by the lending app on its website. Avoid going by the face value or claims made by any of these lending apps.

Check downloads and reviews: One should check how many downloads of this app have been initiated and what views other users have about this particular app. 

In case there are millions of downloads and users have generally shared positive reviews then it highlights positively on the app. However, it is important to be aware of the fact that just having a high number of downloads does not fully underscore an app’s credibility.

For example, about a dozen fake loan apps banned by Google from its Play Store in July 2023 had over a lakh downloads, while 14 had more than 50,000 downloads.

Similarity in terms of name: Many times, fake loan apps tend to use a name similar to that of a  brand of repute to masquerade as a genuine one. 

Customer-care setup: A proper customer-care mechanism is necessary, and it should be shared on the app before the customer gets the Know-Your-Customer (KYC) process initiated.