UPDATED Jun 25, 2022 11:35am to include comment from ZestMoney
We Indians have rushed to embrace the rapid advances in technology without the early warm-up phase that has allowed many in the developed world to recognize their virtues as well as their risks. This is dangerous and costly, especially for banking and financial services customers. This week, I tell you how simple curiosity turned someone browsing a product into a borrower stuck with a personal loan they didn’t want; and how Instagram has become breeding ground for fraudsters to trick people with fake luxury product deals.
BNPL Personal Loan and Trap
Last year, Ratnesh downloaded the ZestMoney app, which gave him a credit limit of Rs20,000. With this, he bought a TV and quickly paid all the equivalent monthly installments (EMIs). A few days ago he wanted to check if his credit limit had increased since he is a good borrower and paid on time. It was then that he saw a personal loan offer of Rs1.40 lakh.
Ratnesh didn’t want the loan but was curious about the interest charged on these loans, so he clicked on the banner. He then checked the available EMI plans when, without even asking his consent, he was sanctioned with a personal loan of Rs1.40 lakh by ZestMoney. He immediately tried to cancel and cancel the unwanted loan and was even more shocked to receive a request that he should pay a processing fee of Rs 5,600 to cancel the loan or be faced with a rate of high interest. Luckily for him, going public on social media allowed ZestMoney to reach out to him and offer to waive the processing fee, on the condition that he refund the full amount.
Ratnesh says, “The government is working hard to ban Chinese apps from disbursing loans and harassing or blackmailing people, and here is ZestMoney looting customers. Without a doubt, I can do it. I can afford the 5 600 rupees they charge as processing fee, but not everyone can.”
These bad loans are not limited to applications alone. Many e-commerce sites offer customers the choice of “buy now, pay later” (BNPL) or refunds on purchases made with certain digital cards. It seems quite easy and cool to buy things and then gradually repay in EMI. But be careful.
The interest component on these credits or loans (yes, these are loans from lenders associated with the application and reflected on your credit report) is quite high. If you are not quick to pay EMIs, you may find yourself in a loan trap.
In an email response to this article, a ZestMoney spokesperson said: “On June 18, the client contacted us saying that he had involuntarily opted for the personal loan. He agreed to pre- close the loan and requested that the processing fee be refunded. The same was considered on a goodwill basis and refunded. It is unfortunate to note that our efforts to make the loan approval process frictionless have not did not meet the customer’s expectations and we regret the experience.
Counterfeiters selling fake luxury goods on Instagram
Amazon along with Cartier, the luxury jewelry brand, have filed lawsuits in the United States against a social media influencer and eight other companies for advertising, promoting and facilitating the sale of counterfeit luxury goods via Instagram and others Web sites.
The fraudsters had posted photos of Cartier bracelets, necklaces and rings on Instagram. At the same time, they registered as sellers on Amazon and other e-commerce portals and listed generic items there. Fraudsters posted an Instagram link and told customers that if they purchased a generic item available for sale on the e-commerce site, they would receive a high-quality Cartier product with it.
Although the case was filed in the United States, such cases are not limited to this country. Many scammers and sellers of counterfeit products also operate on social media in India.
They are particularly active on Facebook and Instagram, offering expensive-looking products at a very low price. A buyer should be careful as these fabulous sounding offers may be for counterfeit products or cheap scams. There is also no guarantee that you will receive the same product displayed on social media.
It is best not to buy goods based on social media posts without checking all the details, especially reviews and reviews from other buyers (this also applies to e-commerce sites).
Stay vigilant for your mobile network
Exchanging a mobile subscriber identity module (SIM) card is not easy for an ordinary man. However, for a scammer, it’s not just easy; but it can wreak havoc in a subscriber’s life. Sagar Singh Kalsi from Delhi found out the hard way.
When his cell phone suddenly went inactive, he went to the service provider to learn that a new SIM card had been issued for his number. This was just the beginning and more shocks were in store for Sagar. While checking his bank account, he found a loan of Rs11 lakh which he had no knowledge of. There was also a transfer of Rs1 lakh from his account through internet banking. He lodged a complaint with the Delhi police, who arrested three people after a month-long investigation.
The police investigation revealed that the fraudster, Sunny Kumar Singh, worked in the credit card department of a reputable bank and had access to customer records from which he gathered information about accounts offering attractive offers and attractive features such as instant loan, jumbo loan and smart EMI. . Banks have certain offers available on mobile apps or the online banking portal, depending on the credit profile of customers. You can check it under offers after logging into your bank account.
His accomplices, Pavin Ramesh and Rakesh, fabricated fake IDs of these clients, substituting their own photographs for that of the client. After getting a new SIM card for the customer’s number, Sunny changed the email ids so that they remain completely unaware of the fraudulent transactions made on their accounts.
If you make a habit of checking your mobile network and email regularly, you may be able to take action in time and get your money back.
KYC Update Fraud
Everyone from the Reserve Bank of India (RBI) to banks have warned customers not to fall prey to know your customer (KYC) messages received from unknown numbers. Yet not only do people respond to these messages by opening the URL/link provided in these messages, but they also share the One Time Access Code (OTP). A victim who did this lost Rs10 lakh from his bank account.
In this case, Delhi police arrested three people from Surat in Gujarat and Giridih in Jharkhand. After analyzing the fraudster’s mobile number and other information, the police discovered that money had been transferred for the payment of certain credit cards. Police later tracked down the name and address of the cardholder and arrested Pravesh Mishra and his accomplice Brijesh Kumar from Surat.
Further investigation revealed that 30% of the looted money was used in Gujarat while the balance was transferred to Giridih using different modes. The police then raided Giridih and arrested Kailash Kumar Mandal, the mastermind of this fraud.