Systemic Issues with KYC Verification Leads to Wrong Credit Disbursal by Dhani and Other Digital Lenders; Urgent Solution Needed
Moneylife Digital Team 28 February 2022
A couple of weeks ago, there was a furore on Twitter when several people found to their shock that their credit reports showed loans that they had never availed. Some discovered these when their credit scores dropped without reason and others when they began to get calls from recovery companies asking for repayment of loans they had never taken.
 
A large number of people had identified Dhani Loans and Services as the company disbursing loans on the basis of misuse of their PAN or other KYC (know-your-customer) details by fraudsters. Moneylife Foundation had collated information on such loans and also took up the issue with the Reserve Bank of India (RBI).
 
It now turns out that the issue is not limited to Dhani Services, but faulty loans are probably being disbursed by most lenders. Moneylife itself has received complaints about at least three other lenders, including a small private bank. 
 
Gagan Banga, non-executive director of  Dhani Loans and its senior management team reached out to Moneylife to say that they have received a total of 162 complaints and each one of these will be resolved and the credit scores corrected. Dhani further said that it does not work on a commission basis to source loans and has tightened its verification process to the best of its ability, within the present system.
 
The Dhani team also explained the process followed by all fin-tech companies to disburse loans quickly. The industry uses two modes of KYC verification. One is the more commonly used Aadhaar route which allows users to verify themselves through a one-time password (OTP) sent to their mobile number linked to the Unique Identification Authority of India (UIDAI).
 
If customers claim that their Aadhaar and phone number are not linked, the loan on-boarding is done by allowing borrowers to upload  images of identification documents to complete the KYC process. It is this that leads to fraud, because dubious borrowers have been uploading fake and morphed identification documents. Dhani says that it has stopped permitting upload of documents since 16th February. However the Aadhar process is also not fool-proof.
 
Here is the verification process followed by other lenders:
 
1) Bajaj Finserv, which offers the Bajaj EMI card, requires only permanent account number (PAN) submission.
 
2) Slice Card, a wholly-owned subsidiary of Quadrillion Finance Private Limited (an NBFC), follows a document upload process similar to what Dhani used to follow.
 
3) Moneytap, by MWYN Tech Private Ltd, follows a document upload process similar to what Dhani used to follow.
 
 
4) CASHe, powered by Bhanix Finance and Investment Ltd., an RBI-registered NBFC, follows a document upload process similar to what Dhani used to follow.
 
5) Kreditbee by Krazybee Services Private Limited follows a document upload process similar to what Dhani used to follow.
 
 
6)EarlySalary also follows the document upload process for KYC verification. 
 
6) Dhani has since stopped the document upload process for KYC verification. Earlier, a person could avail loans from Dhani by giving only PAN card details and address proof as documents. The new measures have slowed down the process of signing up new customers  in the past month, in a bid to tighten its processes.
 
In order to stop stray events of identity thefts, Dhani is working with global security platform G-defence to re-verify each device against a specific customer and PAN through various data fields. As part of its measures, Dhani has also increased its customer support team to 6,500 people to attend to customer problems. The company has introduced a special menu on the IVR of its customer service helpline that will help immediately resolve past cases.
 
 
Mr Banga explained that KYC verification for lending fintechs will always be a challenge in the digital world since we do not have a single ID (unique identifier) which is used across services, including credit bureaus.
 
How To Get Credit Score Rectified?
 
A customer can check her credit score and whether any loan (which has not be taken) is outstanding through the reports furnished by respective credit information bureaus. These reports can be obtained by logging into CIBIL, Equifax or Experian or by accessing through one’s bank via net banking facility.
 
Credit bureaus cannot amend credit data, without express written consent from the lender concerned, since the lender owns the data. Once a rectification request is raised by a customer, the bureau will mark the disputed credit entry as 'under dispute'. It will then take the issue up with the concerned bank or financial institution, after which the request is either accepted or rejected. The turnaround time for such cases could be up to 30 days.
 
If you are facing a similar issue of a ‘ghost loan’ or a fraudulent loan which is showing up on your credit report, then you can write to us at [email protected]. Moneylife Foundation has already forwarded to Dhani whatever complaints we had received till date.
 
Comments
gauravkkale
9 months ago
Why does Moneylife trust Dhani in all this? They themselves and their managers are big frauds. They are doing this themselves and playing victim that someone stole the data from them. Dhani themselves is issuing these unsolicited loans. They are a scam company. Some guy did a very deep analysis of Dhani. Watch that YouTube video DHANI : ANOTHER DHFL IN MAKING.
gauravkkale
Replied to gauravkkale comment 9 months ago
Forgot to post the link to the video: https://www.youtube.com/watch?v=lWX51meeG_M Dhani is a fraud and I am sure in the future Reserve Bank will shut them down and CBI will post many of their executives and fraudulent investors behind bars.
shanterirmp
11 months ago
One of my friend is facing issues with credit card as she was not given any knowledge about minimum amount debit from her saving account against her purchase …. The worst part is when she got to know abt it she after going thru all hell atlast did stop minimum amount facility but to her horrow after interval of around every 40 days or so she started getting calls from collection agent and that too after harassing for around 20 days or so stops and amount from her saving account is deducted in form of late payment, lien amount, Finance charge and Gst.Her purchased amount was just 11k 2018 and under minimum amount and finance charges alone they have recovered 35 k and till date they are showing outstanding amount of 15k on her credit card…hope after reading this she will get help and all will be very careful while applying or getting any credit card .
shanterirmp
11 months ago
Good
Ramesh Popat
11 months ago
excellent !
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