Your Money: Has someone taken a loan in your name? Take these steps immediately

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

While that loan isn’t yours, as a guarantor, it may become your responsibility to repay it. If you fail to do so, it will hurt your credit score.
While that loan isn’t yours, as a guarantor, it may become your responsibility to repay it. If you fail to do so, it will hurt your credit score.

Can someone take a loan in your name? Sounds improbable. But recently, many people on social media were surprised to find loans issued against their PANs by a lending institution. Worse, some of the loans had been defaulted on. For no fault of theirs, these people’s credit scores were damaged by the defaults.

What are the situations in which a loan can be issued against 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 frauds above, people’s PAN had been quoted in loan applications, which were then approved without verification. Since there’s potential for misuse, you must safeguard your PAN and be careful about who you’re giving copies of it to. Your PAN can also be legitimately linked to someone else’s loan. If you are a co-borrower or a guarantor on a loan, it would reflect against your PAN. If the person whose loan you’ve guaranteed defaults, it would impact your credit score. While that loan isn’t yours, as a guarantor, it may become your responsibility to repay it. If you fail to do so, it will hurt your credit score.

Check your credit score regularly
The quickest way to check what’s happening on your PAN is by getting a copy of your credit report. Your credit report lists details of all borrowing associated with your PAN. How much was borrowed, in what form, when, whether payments have happened on time, and what the status of the loan is, are all mentioned in the report. If a loan has been obtained fraudulently against your PAN, it will also reflect on the report. Regularly checking your credit report can help you keep a track of such mishaps and drive you to take corrective action. It is advisable to check your credit report monthly—especially if you use any form of credit.

How to report fraud
If you have spotted suspicious items in your credit report, waste no time in getting to the bottom of the matter. The more you delay, the greater the financial damage. In recent instances, the frauds were reported to the lender. One victim reported that the lender moved quickly to delink his PAN from the fraudulently taken loan. This removed the loan from the person’s credit history. Immediately, his credit score jumped from 776 to 830. It is also important to document these interactions with the lender and put the matter on record. Written assurance must be obtained to ensure the case is being investigated.

How to escalate the matter
If they’re not satisfied with the lender’s response in such cases, citizens have the right to escalate the matter through various channels. First, you may approach the banking ombudsman with your grievance. If that doesn’t suffice, you may escalate through consumer court, or the local cyber crimes unit. You need to 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 long-drawn rectification process if any party involved contests your version of events. But if your story is clear, the matter may be resolved quickly.

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

The writer is CEO, BankBazaar.com

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