Mobile money and loans have been very popular in Kenya of late. This has been possible by the fact that over 85% of population has access to smart phone and internet.
Unfortunately this has resulted to criminals taking advantage of the same to lure unsuspecting Kenyans into mobile loans scams, which has resulted to loss of money.
Characteristics / Signs of loan scams
1: No Credit Check Loans
Online lenders are in the business of making loans and collecting interest when those loans are repaid. The only way they can even guess at whether a loan will be repaid is by looking at a borrower’s credit history.
Don’t believe any lender that says they have ‘breakthrough’ technology that can estimate your credit or the interest rate on your loan through other information like your answers to a survey or from social media.
Legit online loan companies will always want to do two checks on your credit report, a ‘soft’ inquiry and a ‘hard’ inquiry. The ‘soft’ inquiry is just to verify some of your application information and doesn’t go on your credit report. The ‘hard’ inquiry is done after you agree to the interest rate and before your loan is funded.
2: Upfront Fees or Loan Collateral (MPESA / CARD Details)
Upfront fees or loan collateral is the most common of personal loan scams. It used to be that scam lenders would ask you to wire an origination fee from your bank account for processing the loan.
People got wise to this scam so now scam lenders are asking for debit card information to act as collateral on a personal loan. They say that they aren’t touching the money on the debit card but just want to know that there is money there for security on the loan.
Then they drain the debit card and you never hear from them again.
You might pay a fee for a personal loan but it will always come out of your loan when it is funded. If a company is so sure that it can get you a personal loan, why is it asking for money upfront or to be wired from your bank account.
3: No Physical Address
This personal loan scam warning sign isn’t quite as concrete as the others but it’s a good check and could save you when in doubt. Most lenders are going to have a corporate office building or at least a physical address. Even online lenders will have offices somewhere.
Check the lender’s address on Google Maps if you’re unsure about the company. I say this warning sign isn’t as definite because I’ve seen legit businesses where the address image on Google Maps was nothing more than an empty field. The warning sign isn’t perfect but be leery of PO box addresses or non-existent offices.
4: Emails out of Nowhere
It always amazes me how spam email catches so many people every year. Any stranger offering you a commission, bonus or any money in an email is 99.9% of the time a scam. Ask yourself, why are they contacting me and not someone with experience in this kind of thing.
These email scams happen in personal loans as well. You receive an email with a loan offer and a rate that is too good to turn down…along with a link where you can supply your personal information. If the scammer didn’t have malicious software in the link that hacks your computer then the information you provide is more than enough to steal your identity.
Never click on a link or open an attachment in an email that is from someone you don’t know, just don’t do it. It’s not a sweepstakes number or a hilarious cat picture, it’s a hacking scam to get your information.
5: Misspellings, Capitalization and Grammar
This scam warning would be funny if it didn’t still trap so many people into losing their money. If you can’t remember requesting information from a lender and don’t want to just delete the email, make sure you read it very carefully for mistakes in grammar and spelling.
When in doubt, you could even copy the email and put it through a grammar checking site like Grammarly.
How to Find Legitimate Loans on the Internet
Reading through some of the loan scam warning signs should give you an idea of how to find legitimate loans online.
- Always visit the lender’s website directly. Don’t click through an email to go to their site.
- Avoid loans that promise no credit check or that require upfront fees
- Make sure lenders are registered to do business in your state
- Ignore any emails for loans. Legitimate lenders rarely market by email, if ever. Most spend their marketing on advertising online or on TV.
We analyze BrainsPedia
The website has no any menu apart from apply button. A legitimate loan processing website would contain other menus like contact and about usThe domain name was registered three months ago. They then claim to have offered more than 10,000 loans. Lets do maths: Three months = 90 days. 10,000/90 = 110 loans per day. On their application they say that it takes 72 hours to process a loan. How could this happen in three months.
Legitimate loan providers will NEVER ask you to send any processing money without first requesting for your information to verify that you qualify for certain amount. They also request for MPESA transaction code. If you enter any fake code their web server process it successfully as long as its ten digits and above. This shows that it lacks any API communication with MPESA providers to sign the code as legitimate.
If you fill any trash on the application form the information is processed successfully and you get this message. It even process Non-Existing email. Interestingly they give you 72 hours to respond with either positive or negative response.fundHow will they respond to a fake email. They also say that processing fee is not refundable. Like seriously ?
The portal is running an SSL (Lets Encrypt). This is a good digital certificate but its FREE. Anything to do with cash / money you have to display TRUST and CONFIDENCE to the potential client. It would be professional to use a commercial SSL to secure their portal.
It shows that the SSL was installed a week ago. This still shows that the portal is still new.
Finally the advice is for Kenyans to stay away from such scams and report them to firstname.lastname@example.org or @kcsfa. Any reported scam will be treated with utmost confidentiality and a background check done to verify on the same information.