Impact of Fraudulent Digital Lending Apps on Consumer Trust and Financial Well-Being in Bangalore

Sowmya J K 1, Soumya K R2

1 MBA Student, Department of Management Studies, Surana College (Autonomous), Bengaluru, Karnataka, India

2 Assistant Professor, Department of Management Studies, Surana College (Autonomous), Bengaluru, Karnataka,

ABSTRACT

Digital lending applications have transformed access to credit by offering quick and convenient loan services. Along with this growth, fraudulent lending applications have become a major concern due to practices such as hidden charges, misleading loan conditions, misuse of personal information, and unethical recovery methods. These practices can reduce consumer trust and negatively affect financial well-being. This study explores the impact of fraudulent digital lending applications on consumer trust and financial well-being among users in Bangalore. It also examines the relationship between consumer trust and financial well-being and investigates whether financial literacy helps reduce the negative effects of fraudulent lending practices. A quantitative research approach will be used, with data collected through a structured questionnaire from digital lending app users using convenience sampling. The findings are expected to provide useful insights for policymakers, regulators, and fintech companies to strengthen consumer protection, improve financial literacy, and encourage safer and more transparent digital lending practices.

Keywords: Fraudulent Digital Lending Applications, Consumer Trust, Financial Well-Being, Financial Literacy, Digital Lending, Bangalore.