How to safeguard yourself from loan frauds?

With the advent of technology, many fraudsters are using that as a weapon to take loans fraudulently in the name of others by using their PAN and Aadhaar cards. The innocent will not realise the fraud unless they see the CIBIL score. So, beware of those cheats and keep an eye on credit scores if you observe a low score in your SIBIL report, immediately approach the authorities concerned and lodge a complaint with them.

Hyderabad:You will not approach the banks for loans, but a loan account will be opened in your name. No money will be deposited in your account, but notices will be served on you to pay the installments. As a result, the credit score in the CIBIL report will go for a toss. This is the result of some fraudsters taking loans in small amounts from NBFCs by using your PAN and Aadhaar cards. Though it's not your fault, you will join the list of loan evaders in the eyes of banks. So, what will you do when you face such a situation? Adhil Shetty CEO of Bank Bazaar, provides a solution to clear your name from the evaders' list.

We hear many cases of certificates being stolen and fraudsters borrowing money from apps and lending institutions by using your certificates, your name and address. But, the money goes into the hands of other people. You do not know what you owe unless you look at the credit reports. Banks/NBFCs inform credit bureaus such as CIBIL and Experian about each loan account. Depending on the type of loan installment payment, the respective companies will give a credit score. Since installments are not paid in cases where your identity is being used by cheats for taking a loan, obviously the credit score will go down. However, it's a million-dollar question of how cheats are using the identity of others to take loans by using their identity.

Misuse of PAN and Aadhaar cards

Sometimes PAN is linked to other people's loan accounts--for example in the case of a joint loan--both spouses borrow together and suppose the payments go from one's account. If the installments are not paid properly it will have an effect on both credit scores. The PAN will be attached to their loan account even when the guarantee for the loan taken by other persons is signed. If they do not pay the arrears that will also be mentioned in your credit report. As a result, the credit‌ score is damaged. So, it's a good idea to take a look at your credit report and see if there are any such things.

In some cases, it is possible for other people to use the PAN unofficially without your involvement. Unfortunately, some lending institutions grant loans without checking the PAN details. Checking will solve the problem right there, but authorities do not care about this unless the actual owner complains. But by that time the damage was already done.

Check your CIBIL score regularly

Actually, you do not know the fact that someone in your name has fraudulently borrowed money unless you look at the credit report. Hence, these reports should be reviewed regularly. Those who have already taken loans should be more vigilant in this regard. You should see these at least once in a month. Many companies now offer these credit reports for free. Checking regularly can help you stay alert about fraudulent loans. If there is a problem it can be fixed immediately.

As soon as the problem is identified .. the lending institution and the credit bureaus should be informed. If you link your PAN card to any loan without your permission you have the right to ask for it to be removed. The lending institution must respond to your complaint. Complaints can be lodged with bureaus online. One thing not to forget here, credit bureaus make changes and additions to your report based on the details provided by the lending institutions.

If the lender does not consider your complaint if the dispute continues and it is not possible to make a change in the report-- you will need to prove that your PAN was used without your involvement-- if the credit score is damaged .. it will be difficult to get new loans and if you get also, the interest rate can be overcharged. Similarly, sometimes a loan application will be rejected. Hence, you should be careful and the solution to this problem is to keep an eye on your financial details from time to time, advises Adhil Shetty, CEO of Bank Bazaar.

Read:Loan moratorium: Banks ask customers to be cautious against frauds