

Home loan scams have become a nightmare for homeowners, with fraudsters swindling large amounts of money. A recent revelation was made by a Gurgaon man who fell victim to a home loan scam amounting to Rs 4.79 crore via counterfeit property documents.
Banks and homebuyers have been targets of such scams in the real estate sector. Fraudsters have turned creative with their hoax methods. These include identity theft, advance fee scams, phishing, online fraud, and loan modification schemes, says Atul Monga, CEO & Co-founder of BASIC Home Loan.
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A Look at Some of the Fraud Categories
In an identity theft scam, third-parties can take loans under someone else’s name, leaving the innocent party to face the consequences. This type of fraud involves the use of personal or financial information of another person to make unauthorized transactions or purchases. Often, hackers can breach a person’s data, stealing sensitive information including name, bank details, and salary information.
Advance fee fraud, on the other hand, traps victims by asking for upfront charges before disbursing the promised loan. Scamsters trick people into paying advance fees such as income tax, GST fees, or processing fees for winning a lottery or securing a loan.
Phishing scams have risen with the digital age. These involve building trust with individuals through digital means to gather sensitive data. Cybercriminals disguise as trusted entities, tricking victims to reveal personal or financial details.
Loan modification scams prey on those struggling to get a loan. Fraudsters lure individuals with the promise of adjusting loan terms to manage repayments. Such scams involve upfront fees, pressure tactics, and often demands for power of attorney.
Preventing Yourself from Falling Prey to Scams
You can avoid becoming a potential scam victim by implementing some precautionary measures:
Researching the lender is critical. Verify their credibility with the Reserve Bank of India or other regulatory authorities and check their contact information. Look for testimonials and complaints from former clients and visit the lender’s official website to get details about loan options, fees, and interest rates.
Before signing, always check the accuracy of loan documents. Understand the terms and conditions and verify all details such as interest rates, repayment schedules, associated costs, and all other specifics outlined in the agreement.
Avoid paying any upfront fees, even if demanded. Always check the fine print to know the charges and fees involved.
Lastly, stay clear of too-good-to-be-true offers. If the lender doesn’t care about your credit history, steer clear from such dealings.
Awareness is key to staying safe from scams related to home loans.
FAQs
1. What are the different types of home loan scams?
Home loan scams may involve identity thefts, advance fees scams, phishing, online fraud, or loan modification schemes.
2. How can one avoid being a victim of a home loan scam?
By researching the lender, verifying loan documents, avoiding upfront fees, and being cautious of offers that seem unrealistically favourable, one can safeguard oneself from possible scams.
3. What is identity theft in relation to home loan scams?
Identity theft in terms of home loan scams refers to a situation where fraudsters use the personal or financial information of another individual to make unauthorized transactions or purchases. It often involves hackers who breach data to steal sensitive information such as names, bank details, and salary information.