Most infamous fake loan Apps in Nigeria, 2023
This article provides a list of the most infamous bogus loan applications to avoid using in Nigeria in 2023, as well as solid indicators that may be used to independently detect them in the future.
With the rapid digitization of financial services, there has been a marked rise in online lending platforms. While many of these serve as a beacon of hope for those in urgent need of funds, not all of them have pure intentions. Unfortunately, Nigeria has seen its fair share of malicious actors looking to exploit its citizens with fake loan apps. Let’s delve deeper into this pressing issue and understand which apps you need to steer clear from and how to spot them.
The Surge of Online Loan Scams
In recent times, Nigeria has witnessed an unprecedented growth in online lending solutions. Yet, this progress has a dark side, with countless scammers using deceptive loan apps to prey on the financial desperation of Nigerians.
These malicious apps often lure unsuspecting victims with the promise of substantial loans at incredibly low interest rates. By capitalizing on the needs of their victims and the vast, anonymous expanse of the internet, these fraudsters have managed to trap many.
Identifying the Wolves in Sheep’s Clothing
Before we get into the blacklist of fake loan apps in Nigeria, it’s crucial to arm ourselves with knowledge. Here are some tell-tale signs that can help you discern between a legitimate lending platform and a predatory one:
- Too Good to Be True Offers: If an app promises massive loans at interest rates that seem too good to be true, it probably is. Always compare the rates with market standards.
- Aggressive Collection Practices: Genuine lenders follow a structured and legal process for loan recovery. If an app threatens you or uses uncouth methods, it’s a red flag.
- Suspicious Permissions: A legitimate app will only seek permissions that are pertinent to the lending process. If an app is asking for unrelated permissions, it’s a sign to be wary.
- Lack of Transparency: Any genuine financial service will be transparent about its terms, conditions, and fees. If this information is missing or is unclear, think twice.
The Blacklist: Fake Loan Apps in Nigeria (2023)
Based on several factors, including being delisted from the Play Store, facing actions from the Federal Competition and Consumer Protection Commission (FCCPC), and employing illegal or aggressive collection tactics, we’ve curated a list of notorious fake loan apps in Nigeria:
- Easy Moni
- Maxi Credit
- Speedy Choice
How to recognize Fake loan apps in Nigeria
Does the app or the firm that makes it have a physical location as well as a website?
You are need to have a physical address listed in the app from which you intend to borrow. You are not permitted to use the loan application if you are unable to locate a real physical address for your lender. Swindlers who commit loan fraud typically conceal their identities in order to avoid legal repercussions.
A real lender does business from a location that is registered. Because of this, the name of your lender, their phone number, their physical address, and their email address should all be posted on their website.
Do some research on the company that owns the loan application. A reputable financial institution will have a website that can be accessed using their mobile application. You should not move further with the loan application that you are considering using if it does not have its own website.
Inaccessible from the Google Play store
Despite the fact that the Google Play Store is rife with bogus loan applications, the vast majority of fraudulent loan apps can only be purchased through unofficial sites.
Because of the growing number of fake loan apps on its platform, which enables 81% of mobile users in Nigeria to access their accounts, Google has been forced to tighten its filters in order to prevent any further instances of fraud. Additionally, at the request of the FCCPC, Google has removed several fraudulent applications from its store.
One of these applications, known as Sokoloan, was taken down from the Play Store after Google got instructions to do so from the regulatory body.
According to VoiceofNigeria, the FCCPC has reportedly demanded the removal of Maxi Credit, Here4U, ChaCha, and SoftPay from the Play Store due to unethical behavior on the part of the companies.
Nigerians who are looking for loans without BVN are the most likely to become victims of phony loan apps that are unavailable on the Google Play Store. This has become a selling feature of illicit credit platforms and is one of the reasons why people are drawn to them.
Check the internet for ratings and reviews of your lending institution.
A common practice among previous borrowers of the loan app is to publish product or service reviews on the Google Play Store or other review websites. Paying attention to the evaluations that customers provide might give you insight into the kind of loans that your lender offers. Consider the ratings that each app has received in the Google Play Store as well.
Before choosing to work with a particular lender, it is a smart move to go online and research the company’s ratings as well as customer feedback. You can get an idea of how the lender operates by reading reviews posted on reputable websites. In addition to this, you will be aware of any unethical action on the part of the lender that has been reported by past borrowers.
Unfair and abusive methods of collection
Because of the aggressive collecting methods they employ, fake loan apps have become a significant problem in Nigeria. The way they conduct business is to offer a loan in exchange for access to an individual’s personal information and data stored on their mobile device, such as their contact list, as well as their credit score and financial position.
Once the loan is granted, it is often for a fraction of what was initially requested. Within a few days of the loan being approved, representatives of the fake loan app demand payment of the money with criminal interest rates via text messages and phone calls. This quickly escalates into an operation of harassment and threats against the borrower and his or her family.
In other instances, the representatives of these applications send photomontage messages to the connections of people who have sought loans, accusing those people of committing crimes, being paedophiles, or engaging in prostitution; they even send threats with photos of severed corpses. These messages are sent to the connections of the people who have sought loans.
All of these actions, which are considered to be criminal offenses under Nigerian law, including fraud, defamation, and extortion, are symptoms of a fraudulent loan application.
This was the situation with the fake loan apps GoCash, Okash, EasyCredit, Kashkash, Speedy Choice, and Easy Moni, which were raided by the FCCPC in collaboration with the Independent Corrupt Practices and other Related Offences Commission, the Nigerian Information Technology Development Agency, and the Nigerian Police Force for violating the privacy of their customers while attempting to collect debts from them.
Check to see how much access to your personal information the lender is requesting.
Some lending apps have the ability to request authorization for contact information and gallery access in order to perform authenticity checks and underwriting. It should come as no surprise that reputable lenders would treat such information as secret and refrain from sharing it with any outside parties.
However, because of advancements in technology within the fintech sector, lenders are now competent enough to perform underwriting using their own vetted collection processes, which eliminates the requirement that they have access to your gallery and contacts. Any fraudulent conduct is effectively brought to a halt when a lender possesses such capabilities.
In addition, competent online lenders conduct information security audits and routinely monitor the performance of AI systems to ensure the safety of their customers’ data. Before you send over any of your personal information to the lender, you are required to perform your due diligence on the company.
Does loan apps have a website, and if so, how secure is it?
On the pages of your lender’s website where you are required to submit your personal information, you should look for an emblem that looks like a lock. Websites that begin their URLs with https:// are considered to be secure because they take precautions to prevent personal information from being obtained by identity thieves.
If your lender is credible, it will safeguard your information against fraudulent loan offers and make sure it is encrypted and inaccessible to third parties.
In addition, if your lender does not provide clear information about important aspects of the loan, such as the interest rate, then the application for the loan is most likely a fraud.
More Ways to Spot Fake Loan Apps in Nigeria
Here are some tips for spotting fake loan apps in Nigeria:
- Check the app’s reviews: Look for reviews from users who have actually used the app and received a loan. If the app has mostly positive reviews, it’s more likely to be legitimate.
- Research the company: Look for information about the company that operates the app, including its website and social media presence. If you can’t find any information about the company online, or if the information you find seems suspicious, it could be a red flag.
- Look for red flags: Be wary of loan apps that require you to pay a fee upfront or that promise guaranteed approval. These are common tactics used by scammers.
- Be cautious of unsolicited offers: If you receive an unsolicited offer for a loan, be extra cautious. It’s possible that the offer is legitimate, but it’s also possible that it’s a scam.
- Use a secure device: If you do decide to apply for a loan through a mobile app, make sure you’re using a secure device. Scammers may try to steal your personal information if you use a device that is not secure.
If you’re unsure about the legitimacy of a loan app, it’s always a good idea to do your research and be cautious before providing any personal or financial information. If you have concerns about a particular loan app, you can report it to the Nigerian Financial Intelligence Unit (NFIU) or the Central Bank of Nigeria (CBN).
Some of the most notorious ones include ChaCha, Easy Moni, EasyCredit, GoCash, Here4U, Kashkash, Maxi Credit, Okash, SoftPay, Sokoloan, and Speedy Choice.
Fake loan apps often promise unrealistic loan offers, seek unnecessary personal data, use aggressive debt collection methods, and operate outside regulatory oversight.
Genuine loan apps operate under regulatory oversight, provide transparent loan terms, follow strict data privacy and protection laws, and offer realistic loan amounts.
The increase in mobile technology use and the high demand for quick loans in Nigeria have contributed to the rise of fake loan apps.