How to avoid online lending scams

Don’t fall prey to predatory lenders. —CONTRIBUTED PHOTO

President Ferdinand Marcos Jr. recently called for heightened consumer awareness of scams. While the government is cracking down on fraudsters, he said consumers need to be vigilant especially because scammers are using sophisticated tools to deceive people.

Even with mandatory SIM (subscriber identification module) registration, data from the the Philippine National Police Anti-Cybercrime Group show that cybercrimes using a SIM card went up by 190 percent from January to June over last year.

A separate report by the Cybercrime Investigation and Coordinating Center also shows that cybercrimes in Metro Manila rose by 152 percent in the first six months of 2023 compared with last year’s figures.

“We know that borrowers are often in a difficult financial situation, but we also know that they are smart and resourceful. That’s why we continuously provide them with information about how to spot scams. We believe that, with the right information at the right time, borrowers can make informed decisions about their finances and protect themselves from predatory lending practices,” says Iona Iñigo-Mayo, senior director for global customer experience operations at Tala.

Tala is a global technology company that offers financial services to unbanked people in Kenya, Mexico, India and the Philippines. It has so far lent about $4 billion worth of small loans to more than eight million people across three continents.

Aside from working with government agencies to curb illegal lending, Tala shares practical tips on how consumers can steer clear of online lending scams:

Verify company credentials: Refer to official websites and government-verified social media pages to identify legitimate registered companies adhering to regulations. Interact only with Bangko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC)-approved institutions.

Prioritize borrower feedback: Before downloading apps, review borrower feedback to gauge lender reputation and customer service. Consult online reviews or seek recommendations.

Guard personal data: Avoid sharing sensitive information with anyone, including acquaintances.

Beware of unsolicited messages: Exercise caution with unknown messages, emails and texts. Engage only through verified apps and platforms.

Be cautious with communication: Approach unfamiliar callers with vigilance, as scammers often employ deceptive tactics. Validate contact details on official platforms.

Know borrower rights: Understand rights outlined in the BSP’s Financial Consumer Protection Framework. Lodge complaints with BSP and SEC against deceptive practices.

Stay informed: Stay updated, through reputable sources, on modus operandi like phishing (using email or other messages to deceive people into revealing sensitive information that fraudsters could exploit, such as bank details, passwords and credit card numbers) and vishing (like phishing but using phone calls or voice messages to pretend to be from reputable companies to steal personal information). Watch out for BSP, SEC and official bank advisories.