If you are stuck in such a situation, here is what to do.

Mr. Alok Verma, a resident of Jaipur, was meticulously reviewing his financial health when he decided to check his CIBIL report. To his utter shock, he discovered two loan accounts listed under his name from a company called “QuickLoan Solutions.” The report showed that loans for Rs. 9,000 and Rs. 12,000 had been taken out and subsequently closed. Mr. Verma had never heard of, let alone transacted with, QuickLoan Solutions. He immediately sent a detailed email to the company, demanding an investigation and the prompt removal of these fraudulent entries from his credit history. He is now wondering what further steps he must take to protect himself and rectify his credit report, and how long this distressing process might take.

Advice in such cases

Discovering fraudulent activity on your credit report can be alarming. It’s a clear case of identity theft. Here’s a step-by-step guide on what to do:

• Notify Credit Bureaus: Immediately file a dispute with all major credit information companies in India, including CIBIL, Experian, Equifax, and CRIF High Mark. Provide them with a copy of your report highlighting the fraudulent entries.
• File a Police Complaint: Report the matter to the police. You can file a complaint online through the National Cyber Crime Reporting Portal (www.cybercrime.gov.in) or at your nearest police station. An FIR is crucial evidence for your case.
• Inform the Lender: Although you’ve already emailed the lender, follow up with a formal letter sent via registered post. This creates a stronger paper trail. Clearly state that you are a victim of fraud and demand that they close the fraudulent account and rectify the credit report.
• RBI Ombudsman: If the financial institution (in this case, QuickLoan Solutions) does not respond or resolve the issue satisfactorily within 30 days, you can file a complaint with the Reserve Bank of India’s Ombudsman.
• Consult with Lawyer: Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

Such fraudulent activities involve several criminal offenses under Indian law. With the implementation of the new criminal laws, the following sections are relevant:

• Bharatiya Nyaya Sanhita, 2023 (BNS):
  • Section 316 (Cheating): Whoever, by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, is said to “cheat.” This is directly applicable as your identity was used to procure a loan.
  • Section 334 (Forgery): Making any false document or electronic record with the intent to cause damage or injury, or to commit fraud. The loan documents created in your name are forged.
• Information Technology Act, 2000:
  • Section 66C (Identity Theft): Punishes anyone who fraudulently or dishonestly makes use of the electronic signature, password, or any other unique identification feature of any other person.
  • Section 66D (Cheating by Personation using a Computer Resource): Punishes cheating by personation by means of any communication device or computer resource.

If you are the complainant

Once you have initiated the process by filing complaints, your role as the complainant is to be proactive and diligent. Here is what you should focus on:

• Organize Your Documents: Keep a dedicated file with all correspondence, including emails, registered post receipts, police complaint numbers, FIR copies, and the disputed credit report.
• Maintain a Timeline: Note down every action you take, every call you make, and every response you receive, along with dates. This will be invaluable for follow-ups and any potential legal action.
• Regular Follow-ups: Do not assume the authorities or the lender will resolve this on their own. Regularly follow up with the investigating officer at the police station, the nodal officer of the financial institution, and the credit bureau.
• Consult with Lawyer: Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

As a victim of identity theft and financial fraud, your immediate priority is to contain the damage and start the process of clearing your name.

• Act Immediately: The moment you discover the fraud, do not delay. Time is of the essence.
• Secure All Accounts: Change passwords and enable two-factor authentication for all your financial accounts, including banking, email, and UPI apps, as a precautionary measure.
• Formal Reporting: Ensure your complaints are formally lodged with the police (cyber cell), the lender, and the credit bureaus (CIBIL, Experian, etc.). A verbal complaint is not enough.
• Consumer Court: If there is a clear deficiency of service from the lender (e.g., they did not perform proper KYC checks), you can also file a complaint in the Consumer Disputes Redressal Forum for compensation.
• Consult with Lawyer: Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

The police are the primary agency for investigating such crimes. Initially, you might be directed to the cybercrime cell, which is specially equipped to handle such cases. Upon receiving a complaint, especially through the national portal, an inquiry is initiated. They will likely register an FIR under the relevant sections of the BNS and the IT Act. The investigation will involve obtaining the loan application documents from the lender, tracing the IP addresses used for the online application, and analyzing the bank accounts where the loan amount was disbursed. The process can be slow due to the technical nature of the investigation and the need for coordination with banks and financial institutions. Persistence and regular follow-up from your side are key.

FAQs people normally have

Will this fraudulent loan impact my credit score and ability to get a loan in the future?
Yes, absolutely. Any fraudulent loan, even if marked “closed,” can negatively impact your credit score. Lenders may view it as a sign of high credit risk until it is officially removed and your report is rectified. It is crucial to get it removed to ensure your future credit eligibility is not compromised.

Can I sue the finance company for their negligence?
Yes. The finance company has a duty to conduct proper Know Your Customer (KYC) verification before sanctioning a loan. If they failed to do so, it constitutes a “deficiency in service.” You can file a case against them in a consumer court seeking compensation for the mental agony, harassment, and damage to your credit reputation. You can also file a civil suit for damages.

What evidence is required?

To build a strong case, you will need to gather and present the following evidence:

• The credit report (from CIBIL, Experian, etc.) clearly showing the fraudulent loan entries.
• Copies of all communications (emails, letters) sent to the financial institution and the credit bureaus.
• A copy of the police complaint or the FIR.
• Your identity and address proof (PAN card, Aadhaar card) to prove that you are the legitimate person whose identity has been stolen.
• An affidavit stating that you have not applied for or received the loan in question.

How long will the investigation take?

The timeline for resolution can vary significantly. The process with the credit bureau and the lender to correct the report can take anywhere from 30 to 90 days, provided they cooperate. The police investigation, however, is often more prolonged. Depending on the complexity of the fraud, the number of jurisdictions involved, and the digital trails to be followed, a criminal investigation can take several months to even a year or more to conclude.

Advocate Sudhir Rao, Supreme Court of India