Corruption Manifestations During Loan Processing: Police Warning

According to the directive of the Prime Minister of Armenia, an operational working group has been functioning within the police since July 2018. This group was established to enhance the effectiveness of preventing corruption manifestations, illegal payments, and loan sharking that arise during the processing of loans. The group comprises officers from various subdivisions of the main criminal police department.

As a result of joint measures carried out by the operational working group and employees of the police's territorial subdivisions, around 60 instances of fraud have been prepared in the police in the last 6 months. These cases involve employees of several loan organizations who have exploited the trust of citizens by making enticing promises such as offering low-interest loans, removing names from blacklists, and granting loans without a guarantor or registered employment. In these instances, citizens have reported that loaned products were not delivered, or that funds that were supposed to be provided were either not given at all or only a portion was disbursed.

Most citizens have filed reports at the police based on several scenarios. For instance, an employee of a lending institution or someone presenting themselves as such deceitfully took a mobile phone bought through a loan from a citizen and did not provide the promised funds. In another case, an employee of a different lending organization took construction materials bought on credit in a citizen's name and did not deliver the promised money. Moreover, an individual posing as an agent for a loan intermediary organization allegedly appropriated 230,000 AMD claiming it was a legitimate loan fee. Directors and employees of one of the travel agencies fraudulently formed credit agreements under the pretext of granting loans in the citizen's name to seize three mobile phones without providing around 800,000 AMD.

In another case, a citizen got acquainted with someone through social media. Based on that person's offer, they transferred ownership of their car in return for $500 to $1,000 as a collateral, while the person received a loan of 2,496,000 AMD, taking the car under false premises.

These cases could be recounted at length. Almost all the contents of the reports received concerning this type of crime at the police exhibit similarities. Some individuals, presenting themselves as employees of a certain lending organization or a loan intermediary organiztion, suggest citizens go to various shops where they process credit sales in the citizen’s name. In some cases, they pay 30 or 50 percent of the product's cost, while in other instances, they don't pay anything at all, promising to pay in the near future while keeping the items bought on credit with them. Consequently, the citizen does not receive the products they purchased on credit, but they begin to make payments for them.

There have also been instances where an employee or director of a loan intermediary organization, having contacted a citizen via social media, learns the amount of the loan the citizen wishes to obtain and then requests a copy of their passport and photo. After this, the individual applies online for a loan from any organization or bank in the citizen's name. If the bank provides the citizen, for example, a loan of 1,000,000 AMD, that person informs the citizen that they can give them, for example, 500,000 AMD. Therefore, they take the 1,000,000 AMD loan online from the bank and either give the citizen 500,000 AMD or do not give anything at all, leaving the citizen obliged to repay the full 1,000,000 AMD loan.

Dear citizens, undertake loan transactions only with reliable banks and lending organizations licensed by the Central Bank of Armenia. Do not send your personal data or photos to unknown individuals through social media, and do not accept enticing and suspicious offers from unidentified individuals acting in the names of lending organizations or banks, to avoid falling into their traps and finding yourselves in financial difficulties. If you have already been a victim of such actions, please report it to the police.