Do your loan applications get rejected due to a default fake loan mentioned in your CIBIL report? Are you hunting by an unauthorised credit facility that you have never owned? In general, an unknown loan can be reported in your CIBIL because of two possible reasons. Firstly, if there is a data mixing error happened with your CIBIL report, or secondly, if someone has misused your identity to take out a loan. However, in both cases, you should take some immediate action to remove fake loan from CIBIL report; otherwise, it will hamper your creditworthiness badly. In this article, we have discussed both possibilities of reporting a fake loan in CIBIL report, the reasons behind it, and the solution to get rid of it.
Case 1: If a data mixing error happened with your CIBIL report:
In a populated country like India, your name, DOB, and address can be similar to another borrower’s. But the problem arises when the unknown person is a loan defaulter and his credit information are mixed up with your credit report.
Let’s imagine a situation, as a responsible borrower you never delay your loan EMIs or you are going to borrow for the first time. Unfortunately, your loan applications get rejected due to the presence of someone else’s default loan account in your CIBIL report.
Ironically, you are getting penalised for something you didn’t even do, and this could be more pathetic, especially in your financial crisis.
a) Why a data-mixing error occurred:
Such kind of errors may occur at the data submission as well as data aggregation stage. As per the RBI guidelines, every lending institution of India (including PSU Banks and NBFCs)submits their borrower’s details to credit information companies every month.
At the data submission stage, errors may be associated because of the lender’s fault. Usually, your KYC details like Name, DOB, PAN Numbers, and addresses are manually entered by the lender’s staff. Now, due to some typographical mistake, two borrower’s details may be overlapped.
On the other hand, as a leading credit bureau in India, TransUnion CIBIL maintains a huge amount of consumer data in their system. In case, your Name, DOB, identification details, and contact details (such as residential address, contact number) are very similar to an unknown person, then his loan accounts may creep into your CIBIL report. This is simply a technical error by the TransUnion CIBIL.
As a consequence of the data mixing error, not only the unknown loan accounts, you may also find misspelled name, inaccurate DOB, identification details, addresses, phone numbers, and unauthorised credit enquiries reported in your CIBIL report.
In this circumstance, you should remove all the inaccurate information from your CIBIL report completely, otherwise, it may bother you in future.
b) Process to remove fake loan from CIBIL report (Arises due to data mixing- error)
In case of data-mixing error, it is quite easy to rectify your credit report. You are able to remove all the incorrect details from your CIBIL report by following a few steps:
I. Check your CIBIL report and identify the errors:
Before raising any dispute in CIBIL, first you should check your CIBIL report thoroughly. In this regard, visit the TransUnion CIBIL’s official website www.cibil.com, and get a free annual credit report. Go through all the sections of your credit report, such as Personal Information, Contact Information, Account Information, Enquiries Information, etc. Then point out all the inaccurate information that does not belong to you.
II. Raise an online dispute in CIBIL:
Now, to remove fake loan from CIBIL, you need to complain to CIBIL. Mainly, there are two methods through which you can raise an online dispute in TransUnion CIBIL. In the first method, log into your myCIBIL portal and then navigate to the ‘Raise a Dispute’ section.
For an unknown loan account, choose the option ‘The account does not belong to me’ and change all other inaccurate Information with the correct one. Then submit the dispute. After successful submission, a dispute ID will be generated. Keep the dispute id for future reference.
Then you need to write a complaint letter in CIBIL. In the second method, you get the opportunity to describe your problem along with the supporting documents. Don’t forget to mention your CIBIL report control number in the complaint letter. After completing the steps, you will get a Service Request Number against your complaint.
III. Contact with the lenders:
As per the RBI guidelines, TransUnion CIBIL has no authority to make any changes to your credit report without any confirmation from the bank. That’s why when you raise a dispute in CIBIL, they forward the disputed details to the respective lender who has reported the wrong information to them.
In this regard, you can contact the lender directly to get a faster solution. Once the lender confirms to the CIBIL, they will remove fake loan from CIBIL along with the other incorrect information.
Case 2: If a loan fraud happened to you:
In the digital era, anyone can buy a flight ticket or book a hotel by a single click. However, this simplicity comes with its inherent risks that lead to online fraud and identity theft.
Now, the situation can be worse, if there is any kind of loan fraud that happens to you. The fraudulent loan mentioned in your CIBIL report not only damages your credit score, it also leads to financial stress and mental agony. So, let’s try to understand what loan fraud is and how can you deal with it.
i) What is loan fraud and identity theft?
In simple words, loan fraud is a scam, where fraudsters use your identification details illegally to take out a loan in your name and leave you responsible for paying it back. It’s also known as identity theft.
There are several ways through which scammers hack your identity, such as phishing emails, text messages, dark web, and so on. It can be a form of a pre-approved loan offer without a credit check or a loan offer with minimum documents, etc.
While this can be tempting, but scammers may use these techniques to collect your PAN, Aadhar, and bank account details to secure a loan in your name. In fact, ten to fifteen years back, mostly, bank managers and staff were involved in such kind of loan forgery.
In most cases, the victims come to know about such loan forgery, when they apply for a further loan or check their credit report. Unfortunately, by that time, the damage has already been done.
Due to the huge outstanding against the fraud loans, it will damage the CIBIL score and hamper an individual’s creditworthiness completely. If you are going through the same situation, then take some immediate action against the fraud loan to remove it from your CIBIL report.
ii) Process to remove fake loan from CIBIL report (In case of fraud loan):
In the case of a fraud loan, the rectification process is quite difficult and time-consuming. Raising a dispute in CIBIL is not enough, you may have to go for grievance and legal steps against the lender to get rid of the fraud loan.
Raise an online dispute in CIBIL:
Your first and foremost step should be to check your CIBIL report and gather the loan details such as lender name, account number, etc. Then start your complaint against the fraud loan by raising an online dispute in CIBIL.
As always, CIBIL will forward your dispute to the respective bank for verification. Since the fraudster used your KYCs document to take the fraud loan, there’s a high chance that CIBIL will deny your complaint without making any changes.
Contact with the lender:
Especially for a fraud loan, the most crucial step is to contact the lender directly and get a clarification about the loan account. You can ask them to share the loan agreement paper, sanction letter, loan account statement, etc.
In fact, you may notice duplicate signatures and manipulated information in all those documents. Actually, in most fraud loan cases, the bank’s officials are involved directly or indirectly with the forgery.
In case, you are not getting any cooperation from the lender, then you have to take legal action against the lender to remove fake loan from CIBIL.
File a complaint against the lender and take legal action:
There are several channels through which you can register a grievance against the lender. Start with RBI Ombudsmen against the lender. In the complaint letter, describe the whole story and attach all the documents of previous communication by the lender.
Now, if your loan fraud loan has been taken from an online application, in that case, you can also register a complaint in the National Cyber Crime Reporting Portal.
As a consumer, you can register a complaint on the National Consumer Helpline to remove the fake loan from CIBIL.
Now, even after following all these steps, if your concern remains pending, then you have to file a legal case against the lender through NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Once it’s proved that the bank has done forgery to you, the court will order the bank to remove the fraud loan from your CIBIL report. You have to keep patience throughout the process until the issue is solved.
