Your money: Has someone taken out a loan on your behalf? Follow these steps immediately

The quickest way to check what’s happening on your PAN is to get a copy of your credit report.

Can someone take out a loan in your name? It seems unlikely. But recently many people on social media were surprised to find loans issued against their PANs by a lending institution. Worse still, some of the loans had not been repaid. Through no fault of their own, these people’s credit ratings were damaged by the defaults.

In what situations can a loan be issued in your name? Well, it can happen both legally and fraudulently. Loans are linked to your PAN. Any loan linked to you is linked to your PAN. In the loan scams above, people’s PANs were quoted in loan applications, which were then approved without verification. Since there is a risk of misuse, you should protect your PAN and be careful who you give copies to. Your PAN may also be legitimately linked to someone else’s loan. If you are a co-borrower or guarantor of a loan, this would affect your PAN. If the person whose loan you guaranteed defaults, it will impact your credit score. Although this loan does not belong to you, as a guarantor, it may become your responsibility to repay it. Failure to do so will hurt your credit score.

Check your credit score regularly
The quickest way to check what’s happening on your PAN is to get a copy of your credit report. Your credit file lists the details of all loans associated with your PAN. The amount borrowed, in what form, when, if the payments were made on time, and what the loan status is, are all mentioned in the report. If a loan was obtained fraudulently against your PAN, this will also reflect on the report. Checking your credit report regularly can help you keep track of these incidents and prompt you to take corrective action. It is advisable to check your credit report monthly, especially if you are using any form of credit.

How to report fraud
If you’ve spotted suspicious items in your credit report, don’t waste time getting to the bottom of it. The longer you delay, the greater the financial damage. In recent cases, the frauds have been reported to the lender. One victim reported that the lender acted quickly to disassociate his PAN from the fraudulently contracted loan. This removed the loan from the person’s credit history. Immediately, his credit score went from 776 to 830. It is also important to document these interactions with the lender and log the matter. Written assurance should be obtained to ensure that the matter is investigated.

How to escalate the case
If they are not satisfied with the lender’s response in such cases, citizens have the right to escalate the matter through various channels. First, you can go to the banking ombudsman with your complaint. If that’s not enough, you can go to consumer court or the local cybercrime unit. You should also bring the matter to the attention of the credit bureaus. They have their own escalation matrix through which errors in your credit history can be rectified. You must be mentally prepared for a lengthy rectification process if any party involved challenges your version of events. But if your story is clear, the problem can be solved quickly.

Loan fraud can be expensive. But there are tools to help you detect it quickly. Make credit checks a monthly exercise to stay on top of your credit health.

The author is CEO, BankBazaar.com

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