Fraudulent lenders on social media exploit virus crisis in Japan

JIJI – Authorities are warning consumers about a growing number of fraudulent lenders who are attempting to use the ongoing COVID-19 crisis as an opportunity to prey on borrowers via social media.

Most such scams apparently involve individual lenders who are not registered to provide such services.

The Financial Services Agency has launched an investigation, while cooperating with the National Police Agency to alert the public over the loan scams.

Shady lenders are said to have been prowling Twitter, trying to get in contact with people in need of money.

They post comments including, “For those who have fewer jobs due to the coronavirus, I can lend money if conditions are met,” with hashtags such as “#corona,” in an attempt to encourage potential borrowers to contact them through the direct message function on the social networking service.

Loan sharks are apparently using the method to find targets at a time when an increasing number of self-employed people are being affected by the crisis, according to people familiar with the situation.

The police have made arrests, including one case in which a scammer defrauded a victim of money described as a security deposit and another involving a victim who was pressed to provide sex as a loan condition.

The FSA is calling for caution. Scammers are also said to be using tricks to attract targets, such as advertising that advance fees are not needed.

Borrowers may be forced to pay exorbitant interest rates if they borrow money from unregistered lenders.

The moneylending business act obliges lenders to show their registration numbers when soliciting borrowers. The Japan Financial Services Association is calling on people to check the numbers using its website when they borrow money.

It is also urging people to file a report with police or the association when they see suspicious posts on social media.