Interstate fraudsters have become increasingly active in Bengaluru, preying on businessmen who are in need of large loans to meet their working capital needs. These fraudsters have been successful in cheating many victims out of their hard-earned money, causing great concern for the city police. In this blog, we explore how a digital escrow system like Castler can protect businesses from falling prey to such scams.
One such victim of a business loan scam is P Krishnam Raju, a 65-year-old resident of Hyderabad. He was promised a loan of Rs 100 crore to expand his business by two individuals who visited his office in Hyderabad. However, after transferring Rs 1.8 crore towards the interest on the loan, Raju became suspicious when the loan was not transferred to his account as promised. He contacted the police, who later arrested the accused individuals.
Similar cases of cheating have been registered in the past, with fraudsters using the same modus operandi. However, the use of a digital escrow system like Castler could have prevented these scams from happening in the first place. A digital escrow system acts as a trusted third-party intermediary between the buyer and the seller in a financial transaction. It ensures that the funds are only released to the lender once the loan is approved, and the conditions agreed upon are met.
If the lender fails to disburse the loan amount, the escrow system allows the victim to claim a refund of the money held in escrow. The system provides a transparent and secure way of carrying out the financial transaction, preventing fraudsters from diverting the funds to purchase gold or any other illegal activity.
In Raju’s case, the use of a digital escrow system could have prevented him from falling victim to the fraud and losing Rs 1.8 crore. The system would have provided a secure and trusted platform for conducting the financial transaction, ensuring that the lender fulfilled their obligation before receiving payment.
In conclusion, with the increasing number of business loan scams, it is important to take preventive measures like using a digital escrow system like Castler. Such systems can provide much-needed fraud protection and prevent innocent victims from falling prey to these scams.
