THE figure of the loan shark has always been a grim and fear-inducing one. For centuries, the creditor showing up at your door to demand money has been the central plot of many a tragedy. In many novels of Charles Dickens, it is creditors who precede the carting off of many a character to the debtor’s prison.

Even now, a mother, wife or sister putting her jewellery up as collateral against a loan and then losing it all when the money taken cannot be repaid is a frequent character on television and in films and books. In some Western reality shows, the ‘repo-man’ is seen tracking and then outwitting payment, dodging borrowers or simply carting away cars or other items that have been bought on unpaid loan. There is money to be made in loan collecting just as it is in lending to needy customers at high interest.

However, it must also be said that there are legitimate fintechs that are entering consumer markets to provide instant loans (albeit often at very high interest rates). Their existence has created a grey zone that can be exploited by scammers to fool potential borrowers.

According to news reports, loan scams are predominantly seen in Mexico, Thailand, Indonesia, India, Pakistan, Colombia, Kenya, Singapore, and the Philippines. While the details may vary, the general ploy is the same: a customer is coaxed into taking an instant loan which can be approved and deposited into the borrower’s account at great speed. Note that these fast loan approvals themselves are not........

© Dawn