Fake loan apps are on the rise, and you must remain safe. (Representative image)
As fake loan app ads continue to run rampant across social media, the central government is tightening its grip on these platforms, coercing them to eradicate this menace.
The presence of fraudulent advertising on social media platforms isn’t something new. In recent years, nefarious entities have exploited social media platforms to circulate fake loan app advertisements. However, there may be a glimmer of hope for users in India, who encounter such deceptive content. According to a report published by The Indian Express, the Indian government is taking measures to stop the distribution of such applications.
“We will amend the existing Information Technology Rules to prohibit intermediaries from hosting advertisements of fake loan apps,” said Rajeev Chandrasekhar, the Minister of State for Electronics and IT, Government of India.
This is an important concern for the central government as fake advertising continues to run rampant across the web, and in particular, on social media platforms like Facebook, Instagram, and more. The report adds that fraudsters are able to post ads on these platforms for a fee but later take them down once they are spotted. Ergo, if platforms continue to allow such advertising to be circulated on their platforms, they will lose out on “legal immunity.”
Additionally, Rajeev Chandrasekhar mentioned that the Ministry of Information Technology has been engaged in discussions with the Reserve Bank of India over several months for the same. However, it was only recently that key efforts have been made to address and mitigate this issue.
How Do These Ads Work?
It is known that fraudsters typically bring unsuspecting victims onto their platforms by using attractive (and unrealistic) advertisements. Predominantly loan applications, these advertisements often promise fake interest rates and present a misleading narrative.
However, the crux of the issue emerges when victims borrow money from these applications based on the promise of low interest rates, only to be subsequently informed of undisclosed fees and interest rates upon approval. Furthermore, these applications may gain access to sensitive user data such as messages and contacts, which can be exploited for deceptive purposes and spamming.
According to The Indian Express, the fraudulent loan applications market is approximated to be valued at around $700-800 million. Additionally, individuals who become entangled in this problem often succumb to suicide.
RBI Gets Updated ‘White List’
Presently, victims entrapped in such deception indicate that the absence of regulatory standards leads to online platforms failing to exercise proper due diligence, which enables frauds to evade detection. Furthermore, in the past, the Reserve Bank of India (RBI) lacked a definitive list distinguishing genuine from fraudulent loan applications. However, a list has now been shared with the central government.
“The RBI has been working on a list of valid lending apps for a while but has sent us a new list of loan apps that are being used by registered entities like banks and NBFCs after your report came out. We will take action accordingly,” an official was quoted as saying by The Indian Express.”
Source website: www.news18.com