Before you download that mobile app and apply for that loan, you need to know that some loan apps are banned in Nigeria.
In 2022, the National Data Protection Bureau (NDPB), working with the Central Bank of Nigeria (CBN), and other agencies of government, investigated the activities of online financial loan companies.
Some of those companies were found culpable in defrauding vulnerable Nigerians using certain applications.
How to identify fake loan apps in Nigeria
Identifying loan apps that are banned in Nigeria is not as difficult as many assume. By looking out for the right places, fake loan apps are easy to spot.
● Non-availability in app stores
There are two major app stores: Google Play Store and Apple App Store.
If the loan app you are about to patronise is not hosted on either of these platforms, there is a high probability that it is fraudulent.
Note that fake loan apps also exist in the Google and Apple stores.
● Unethical loan recovery methods
Before downloading a loan app, make sure you read its review. If there are reports of invasive or unethical methods of loan collection, you are about to walk into a trap.
● Hidden charges
Most of these fake loan apps in Nigeria offer credit with ridiculously low interest rates. After the loan is approved, representatives of the fake loan app demand payment of the money with illegal interest rates via text messages and phone calls. This quickly becomes a harassment operation against the borrower and his or her family.
● Unsecured website
Another method of identifying fake loan apps is via their shady websites.
To identify a fake loan application, go to their official website and make sure the URL is secure. The “HTTPS” prefix can identify a secure website in the web address.
However, if the URL only contains “HTTP” without the final “s,” it is probably a fraudulent loan application because legitimate businesses must adhere to security regulations to encrypt customer data.
Additionally, the URL needs to display a padlock, a sign that the website has an SSL certificate verifying its security.
● Inadequate functionality of web pages
You can discover a fake loan platform based on how well their websites work. Spelling errors, wrong internet and email addresses, and other discrepancies with the loan application are very common.
Visit the lender’s official website and check that all buttons and links work correctly. If not, this can signify that the website has been cloned and is not trustworthy.
● No physical address
Another major red flag to note about fake loan apps is the absence of a physical address.
Every credible financial platform has their office address posted on their website or app.
A loan app that has no verifiable means of being contacted, including a phone number or an email is out to swindle you.
● Negative reviews
As stated, customer reviews are a great way to determine if a loan app is fake.
Search for the loan app online and see what kind of information pops up.
Most fake loan apps do not have any digital footprints. And even when they do, they are usually fraught with negative reviews.
Spending a few minutes researching the loan application’s reputation before applying may just save you from an impending heartbreak.
● Advance payment
Only fraudulent loan apps request for some form of payment before disbursing a loan.
Cybercriminals ask for payment in advance by preying on the user’s helplessness and inexperience.
A trustworthy loan application might charge you an initial fee, but they never request this sum in advance; instead, they add it to your credit payment.
● Requests for sensitive information
While registering with a loan app, some information is requested. However, no credible loan app will ask you for sensitive information.
Sensitive data, like credit card details and bank account passwords, are frequently requested on fraudulent loan applications.
You shouldn’t divulge this information if a loan app demands it. This is undoubtedly one of the main red flags that raise doubts about the offer’s legitimacy.
● Undisclosed loan terms
Every loan platform must make their terms and conditions of service known.
Loan apps with unfair conditions or undisclosed terms are up to no good.
20 loan apps that are banned in Nigeria
There are many reasons why loan apps get banned in Nigeria.
Some eventually meet the criteria of operations and have the ban lifted.
However, by February 2023, the activities of the following loan apps have been suspended by the regulating bodies in the country.
- ChaCha
- Easy Moni
- EasyCredit
- GoCash
- Here4U
- Kashkash
- Maxi Credit
- SoftPay
- Sokoloan
- Speedy Choice
- Cash mall
- LCredit
- Palmcash
- GoTocash
- Cash wallet
- GGmoney
- Naira plus
- Fast Money
- Lioncash
- 9Credit
How to guard against fraudulent loan apps
The Central Bank of Nigeria (CBN) and the National Information Technology Development Agency’s (NITDA) monitors businesses and ensure they abide by regulatory guidelines and rules for legal operation.
Registered lenders usually follow a strict set of guidelines, and a code of conduct, in working with borrowers and ensuring the best possible experience for everyone.
However, the rise in the world of online payments and the digital revolution has also led to the development of online scams.
As an individual, the following steps will guard you against falling prey to their activities.
● Always sign out of websites
Whether you are working with your personal computer or a public system, always sign out before leaving the site whenever you log in to online banking or a loan website.
● Keep your financial information private
No matter how tempting it is, do not share your private details with a third party. This includes your passwords, ATM card pins, and other financial records
Keep your financial documents safe and secure because doing so can help you prevent identity theft.
● Be vigilant
Watch out for potential scams. One of the best ways to stay protected from online loan scams is by having complete information on them.
You must double-check every loan offer you receive and verify their contact details to see if they are legit.
● Be wary of spam calls
You must be aware of any phishing calls, SMS or emails you receive. To do this, you can use identity verification apps that show you the details of the person who is calling.
Fraud numbers are usually marked as spam, and they will give you an idea of the person who is calling you. If you encounter any number like this, make sure you report it to the authorities.
● Stay secure
Secure your devices with up-to-date protection.
Make sure you keep getting regular updates for the operating system on your phone and laptop because it brings in new security updates that help you to stay safe.
If you have any antivirus software installed, make sure you update them as well.
● Set strong passwords
Having a strong password can easily help you keep your financial information secure.
Make sure your password has more than eight characters, including uppercase and lowercase letters, numbers, and special characters.
If you’ve been a victim of a fraudulent loan app, history should not repeat itself. By using nairaCompare’s comparison tool, you can access a large pool of authentic loan service providers in Nigeria, compare rates and select the one that’s best for you.
