Online lending scams have become a prevalent issue in the Philippines and are regarded as one of the fastest-growing organized crimes not just in the country but also all over the world. The modus operandi also comes in various forms — from advance fee scams (paying an upfront fee or deposit), phishing, and identity theft, to loan sharks that force victims to pay up more than they need to.
To address this issue, President Ferdinand “Bongbong” Marcos Jr. has urged consumers to be vigilant against such scams, saying that the best way to protect yourself is to be knowledgeable about online fraud and to conduct some research first before making any loans or online payments.
He added that the Philippine government is currently cracking down on these scams but that consumers should be extra vigilant, especially since scammers are now using sophisticated tools to deceive people.
Tala shares tips on how you can avoid being victimized by illegal lenders
Global financial platform Tala echoes the sentiment of the president, even reinforcing its commitment to further spreading financial literacy and taking dedicated steps to inform borrowers and the general public about how to detect illegal tactics used by illegal lenders.
“We know that borrowers are often in a difficult financial situation, but we also know that they are smart and resourceful. That’s why we continuously provide them with information about how to spot scams. We believe that with the right information at the right time, borrowers can make informed decisions about their finances and protect themselves from predatory lending practices,” shared Iona Iñigo-Mayo, Senior Director for Global Customer Experience Operations at Tala.
According to Iona, since scammers are constantly coming up with new ways to exploit people, it is also important for borrowers to be made aware of the schemes and to be able to spot them miles away.
Tala shares the following tips to avoid online lending scams:
- Deal only with registered companies — ensure that you visit the official websites and verified social media pages of government agencies, such as BSP and SEC, to find out which companies are registered and regulated. Only interact with record-keeping financial and lending companies in good standing with the BSP and the SEC to obtain credit and other financial products and services. Check if these companies comply with the legal guidelines, such as registration requirements and recommended interest rates.
- Look for reviews from other borrowers first before downloading the mobile application — this is a great way to get an insider’s perspective on a lender’s reputation or customer service history. Check reviews online, or ask your friends and family for recommendations. For lending platforms that use mobile applications, make sure to check the Google Play or Apple Store ratings and reviews from their users.
- Never share sensitive information — do not volunteer sensitive and personal information such as full name, contact number, password, or the one-time PIN of digital banking apps to anyone, even to your friends.
- Be wary of suspicious messages — avoid reading and clicking on links in suspicious text messages, social media posts, and emails from unknown individuals and organizations. Interact only with the official mobile applications or websites and social media pages that are verified by a check mark or similar symbols.
- Be cautious of unfamiliar calls — be vigilant when answering phone calls, especially from unfamiliar numbers and international hotlines. Scammers often use spoofed phone numbers, which means that the caller ID would show a bogus number. When the recipient calls that number back, they will be connected to a premium rate number and charged a high fee for the call. Always make sure you are communicating with official emails and numbers of the digital platforms that you are dealing with. Registered lending companies usually have their own email domain and have their numbers listed on their websites.
- Be aware of your rights as a borrower — the BSP’s Financial Consumer Protection Framework has mandated financial providers “to conduct ethical business practices and not to engage in practices that may cause harm to the consumer.” Borrowers who believe they have been abused or deceived, and suffered fraud, can also file their complaints at the BSP’s Consumer Assistance Channels or at the SEC’s Complaints page.
- Be vigilant and stay informed — keep updated about emerging technology and fraudulent scams like phishing and vishing through news, warnings, and guidelines from the government, banks, and other reputable institutions. The BSP guidelines on these subjects are thorough, user-friendly, and helpful.
- Read and understand the conditions first — always study the terms and conditions first, as well as the disclosure statement, before proceeding with any credit transaction.
Tala is committed to spreading financial literacy and helping consumers get the best offers without being scammed. It advocates a variety of resources to help borrowers learn about the lending process and how to spot scams. It also works with government agencies to crack down on illegal lenders.
For questions or concerns about legitimate online lending platforms, email Tala at support@tala.ph. You can also interact with them through the official Tala app. Tala is operated by Tala Financing Philippines Inc., a licensed financing company with SEC Registration No. CS201710582 and Certificate of Authority No. 1132, and a registered operator of the payment system, with OPS Registration No. OPSCOR-2023-0010.