In India, technology has transformed financial services and has given rise to a whole new industry, popularly addressed as fintech. This industry has witnessed phenomenal growth in India and across the globe in the past few years. According to Inc42data, between January and August 2021, fintech companies received funding worth $806 million, making up the second-largest share—18 percent—in the fintech funding pie. It has witnessed magnificent growth because of easy credit business models like peer-to-peer lending, BNPL, and digital loans. It has also ushered innovation in ancillary industries or enablers of fintech space such as e-KYC, payments gateway, credit scoring, etc.
These trends have gained the attention of investors as well as fraudsters who have come up with several ways to con a system and make quick money. According to the Reserve Bank of India’s working report, over 1,100 digital lending apps are available on Indian app stores, out of which more than 600 lending apps were found unlawful.
Availing of a personal loan through a digital lending app is relatively easier, especially during the COVID-19 pandemic, as it has also increased personal loan scams. In fact, within the past year (up till March 2021), 45,613 loan fraud cases were reported, which amounts to…
