Loan is a trending topic in Kenya today. They also have the highest money loan apps. Unfortunately, potential loan scams are rising too. People take loans either to consolidate debt or solve personal pressing needs. There are certain things banks consider before approving or giving you loan.
In view to help get people through until they get back to normal, Fintech companies developed many loan platforms. Scammers also have noted these loan platforms. Unscrupulous people also try to take advantage of people’s needs by disguising as loan lenders while they are fraudsters.
If you have determined that loan makes sense for you. The next thing is to be watchful of red flags and warning signs of loan scams and fraudsters. These unsavory people and loan platforms are finding more opportunities to dupe borrowers every day.
Let us look at how to identify loan scams and fraudsters in Kenya.
What are loan scams and fraudsters
Loan scams are fraudulent loan platforms or loan businesses that feed on borrowers illegally. They dupe borrowers who are looking for easy access to loans to solve their financial problems. In addition, they are often illegitimate loan businesses that promise to lend money to people in need, but they feed from people.
Loan fraudsters are the individual or people themselves who engage in loan fraudulent transactions.
What you need to know about loan scams and fraudsters in Kenya
Most loan scams seek to either extract money upfront by telling you to pay a registration fee or any other fees before they disburse the loan. Some also provide loan duration so neglecting that borrowers will be subject to default which results in late fees or other charges. They come in different ways and with different methods.
Moreso, their processes are so quick and easy that they do not have many requirements. Often, they do not consider your credit history and personal details. All they need is immediate attention and registration fee. They sometimes go in disguise of promising free money to fund businesses and solve personal needs.
Ways to identify loan scammers in Kenya
The following features are ways to identify loan scams in Kenya:
- Registration fee scam and low-cost loan fee: fraudsters come in disguise of you paying a registration fee for a said thousands of money in return. Once they get the fee, they cut all contacts with you. Some also offer low-cost loans
- When the lender’s Website is not secure: if the site of the lender starts with http instead of https, there is a high probability that the site is a scam. It easily exposes every transaction done on the site. So many hackers use Keystroke loggers to record the information typed on the site which they will use later to commit a fraud on the person.
- When the Lender is not registered with the government: if the lender is not registered in the country with government registry bodies, then the lender is probably a scammer.
- When the Lender is not interested in your payment history: Reputable Lenders will verify that the borrower can and be able to repay the loan before they agree to the transaction. If a lender does not check your credit, then you are being defrauded.
- When the lender does not have a physical address: If the lender does not have a physical address, but parades around without definite purpose, the lender is a scammer. Always run a quick online search using the lender’s official name. If It’s legitimate, the search will bring up the physical address of the lender.
- When the lender calls and disturbs often: Whenever the lender calls all the time requesting your prepaid credit card details or when he demands loan collateral, insurance or other fees, he is probably a fraudster.
- When the lender is not transparent about the fee and other terms: Some loan scams and fraudsters are not clear with their fees. They tell you a very low cost fee or no interest at all to lure you. Some even go to an extent of telling you that shouldn’t bother about the terms. Beware of these baits.
- The lender is not affiliated to any financial institution: majority of lenders work with banks and other financial agencies to help serve their customers better. Some of these loan scams and fraudsters have no root. They just wake up one morning looking for who to dupe.
Who is most prone to the risk of loan scam and fraudulent transactions
Fraudsters do not go after people who are ready to go by the rules. They go after people who want quick money but not ready to meet the requirements. The most people prone to loan scams are:
- Borrowers with a lot of debt that in need of money
- illiterate elders
- Borrowers with bad credit that desperately need quick cash
Types of loan scam and fraudsters in Kenya
There are three main types of fraudsters that operate in Kenya. They are:
- Loan scam that offers low loan fee: these types of fraudsters will promise you thousands of money for a hundred. The money you pay as either application or facilitation fee will be taken and not returned forever. They breach or cut all contacts
- Loan scam with no credit check: the goal is to get a prey and feed on. They promise you a fund without checking your credit history. They also entice you with sweet promises and later won’t provide the loan.
- Student’s loan forgiveness or empathy scam: they tell students that the government or private lenders have forgiven their loan and in return they need to pay a final fee. Once they collect the fee, you will never contact them again.
What to do if you become a victim to loan scam and fraudsters in Kenya
When you have fallen victim to loan fraudsters, do not panic too much or contact them to bargain anything. It is important you follow due processes to see people that will legitimately help you. The steps to follow in resolving the issue are:
- Call or visit your local police to report and file your complaint
- Contact CRBs in Kenya and notify them that your personal information has been compromised
- You can also contact attorneys in your state and lay complaints. They can put out the loan scam online so other people can avoid them.
If you need a loan, compare multiple lenders and do your findings. In order to make sure you are in safe hands, check about the lender both online and offline. Check out for lenders that offer competitive rates and ready to go by the normal rules.
Do not use it because you didn’t meet the requirements for a loan to fall into the hands of loan fraudsters. Not only does vetting financial institutions is the best way out, it also helps you get the best interest rate.
Watch out for lenders asking for money upfront or consistently pressure you into coming to patronise. If you cannot read and understand, be sure to go with someone who can read and understand. When in doubt, it pays to go with a popular lender in town and face it squarely to avoid terrible stories. Remember loan fraudsters can compound your problem, give you hypertension and even take away all your life savings.