Online loan scams which land institutions and individuals in trouble

3 October 2023 12:00 am – 0      – 248

facebook sharing button
twitter sharing button
sharethis sharing button
whatsapp sharing button
viber sharing button
A A A

In order to establish trust with the targeted institution and secure online loans those involved in fraudulent financial activities arranged to promptly repay an initial loan and once trust is established with the financial institution individuals secure a second loan using different SIM cards

 

Many borrowers have faced difficulties due to these loans where daily interest rates are misrepresented as monthly rates and other misleading terms

Unsuspecting individuals can easily obtain instant loans ranging from Rs 30,000 to 50,000 without having to produce collateral

Some SIM cards used in these loan scams were registered in the names of deceased or individuals residing overseas

It has been revealed that the fraudsters involved in this scam also received commissions ranging from 5000 to 10,000 rupees-depending on the loan amount- obtained by borrowers 

When borrowers default on payments lenders take harsh actions to recover the outstanding loans. These methods include the publication of borrowers’ photos and personal information on the internet, coupled with phone threats 

 These are days when online loan systems are in operation offering a quick and convenient solution to individuals to meet their financial needs. Various institutions provide these loans through online platforms, using diverse methods. There are many borrowers who faced difficulties due to these loans where daily interest rates are misrepresented as monthly rates and other misleading terms.When borrowers default on their payments, these lenders take action to recover the outstanding loans. This includes the publication of borrowers’ photos and personal information on the internet, coupled with phone threats. There are also many individuals who obtain loans through micro-finance institutions and find themselves being in a position where they are unable to repay monies obtained.

These individuals extend generosity in abundance when providing loans, but their goodwill diminishes thereafter. Even when loans are advertised with monthly interest rates, the interest on the loan amount accrues on a daily basis. These institutions provide loans after obtaining a salary report, a copy of the identity card and a certificate confirming employment. Once a trust is established the owners of these institutions readily approve loans ranging from 5,000 to 20,000 rupees. People in urgent need of money often turn to these institutions for loans. Individuals borrower consistently and repay both the loan and interest and then renew their loans. They can easily obtain instant loans ranging from Rs 30,000 to 50,000 without requiring collateral. Most of these lending institutions operate without being registered with the Central Bank of Sri Lanka; falling into the category of being illegal entities.

This newspaper isn’t praising microfinance lending institutions or online lending institutions. Typically, such companies are accused of harassing borrowers or engaging in illegal activities; often centered around the suffering of the borrower. This newspaper will reveal details about a group of individuals who deceived an online lending institution, fraudulently and obtained a sum of 2.5 million rupees. Allegedly, the fraud involves a group of employees from the Sri Jayawardenepura Kotte Municipal Council.
It has been revealed that the culprits behind this fraud took steps to carry out a financial scam by deceiving officials of Zephyr Solution Pvt Ltd. In order to establish trust with the targeted institution and secure online loans, those involved in this fraudulent activity arranged to promptly repay the initial loan amounts ranging from 5000 to 10,000 rupees within two to three days. Once the trust was established with the respective financial institution, the individuals in question contacted the institution and secured loans using different SIM cards. It has been discovered that this scam involved the use of about 72 different people, headed by a group of five individuals.
Those involved in the financial fraud have provided well-prepared responses to the questions posed by the officers of the lending institution. These individuals have familiarised themselves in advance with the anticipated questions and corresponding answers; all done with the aim of misleading the officials of the aforementioned institution. The loan documents have been entirely forged and these individuals have managed to provide documentation suggesting employment in various local institutions. After obtaining the loan, the fraudsters discarded the used SIM cards and defaulted on the loan payments. Some SIM cards were registered in the names of deceased or overseas individuals. Once they acquired the loan repayment obligations were ignored. Additionally, the WhatsApp video calls made during the loan application process originated from the same location.

These calls were consistently made from an environment featuring a whitewashed wall in the background. The institution, considering the increasing number of loan applicants, has granted the money requested through the loan with the anticipation of profits.
When the borrowers failed to repay the loan, the relevant institution conducted an investigation and discovered that the aforementioned financial fraudsters had obtained an amount running up to 2.5 million rupees. Those involved in this financial fraud have already executed their scheme. It is astonishing that the concerned institution remained unaware of this fraud until 72 individuals were employed to obtain loans ranging from 5000 to 20,000 rupees. It has been revealed that the fraudsters involved in this scam also received commissions ranging from 5000 to 10,000 rupees-depending on the loan amount- from the borrowers. An official from the relevant financial institution stated that he became aware of a financial fraud when he investigated the background of the WhatsApp video call.

He also stated that a complaint has been lodged with the Municipal Commissioner of the Sri Jayawardenepura Kotte Municipal Council, as well as with the Mirihana Police. This newspaper attempted to inquire into this fraud by contacting the municipal commissioner, but all such attempts proved futile. However, according to a spokesperson from the Municipal Council it has been revealed that the Mirihana Police has received a complaint regarding this type of financial fraud. The spokesperson added that the Mirihana Police will be conducting an investigation.
When questions were raised regarding this matter an officer from the Mirihana Police confirmed receiving a complaint regarding a financial fraud connected to an online lending institution and said that a comprehensive investigation is underway.

Author