Don’t become a victim of a personal loans scam

Fraudsters are posing as legitimate loan providers to fleece consumers out of their hard earned cash this festive season, finds Angelique Ruzicka.

 

If you are approached by someone offering a personal loan at the insistence of a deposit or upfront admin fee, chances are you could become a victim of a scam and you will lose your money. According to Clientèle, part of the JSE-listed Clientèle Limited Group, there has been an upsurge in scams where individuals are led to believe that they are applying for genuine personal loans. The company is not the only firm targeted in the scam. Others include Wonga and Blue Financial Services.

 

Clientèle said fraudsters get access to databases of names and contact details in the public domain and then pose as Clientèle or other financial institutions, using the company’s own branding, to lure unsuspecting consumers into applying for loans. The conmen then request them to pay a deposit or initiation fee into a bank account and this is when the fraud and theft of money takes place.

About 120 have fallen victim of the personal loan scam and reported it to Clientele and one person has so far been conned out of R74,000 after thinking he would be granted a business loan. However, there could be more that have fallen victim to the con, which have not reported the matter. “These fraudsters are asking for a fee of between 1-1.5% of the value of the loan upfront,” points out Wilna van Zyl, public officer of Clientele. People don’t report it as they feel stupid for becoming victims.”

 

Sophisticated con artists

Van Zyl says these fraudsters are sophisticated in that they are familiar with the loans application process, copy the logo of the NCR for authentication purposes and use Legalwise’s documents to consumers as part of the ‘contract’. “Personal information is asked for as well as ID numbers so we are advising victims to go to their banks so that additional security measures are put in place,” she says.

 

“We want to warn our clients, and the South African public, that when applying for a Clientèle loan, we will never ask the recipient to pay any money upfront in order to secure the loan. Our initiation fees will always form part of the repayment of the loan,” said Dr Gary Simpson, group executive: compliance and risk at Clientèle.

 

“As a responsible company with the best interests of our clients and other consumers at heart, we want to alert the public that this elaborate scam has already taken in many people and has cost consumers dearly.” According to Simpson, the scam targets consumers mainly via SMS messages or via emails.

 

Fraudsters are not only posing as Clientèle operators. “Our company is just one of several companies being targeted by the operators of this scam. We have initiated a proactive marketing campaign to warn people about this fraud that can cause them unnecessary financial hardship,” he said, adding that advertising has been booked in various mass media to warn consumers about the scam.

 

“We want to protect our legitimate personal loans business, which assists many individuals with their day-to-day financial planning, but we also want to protect people from being taken for a ride by unscrupulous fraudsters.”

 

Consumers drowning further in debt

The news comes as the National Credit Regulator (NCR) released figures showing that consumers are drowning further in debt. Nomsa Motshegare, CEO of the NCR has encouraged consumers to monitor their budgets closely against the reckless spending of their hard-earned bonuses.

 

Credit bureaus records show that the number of consumers with impaired records increased by 71,000 to 9.76 million, from 9.69 million in the previous quarter. As a percentage of the total number of credit-active consumers at 48.1%, this reflects an increase of 0.1% quarter-on-quarter and 1.1% year-on-year %.

 

The number of accounts decreased from 71.20 million in the previous quarter to 71.17 million. The number of impaired accounts increased from 18.87 million to 19.25 million when compared to the previous quarter, an increase of 375,000 quarter-on-quarter and 1.99 million year-on-year.

 

However, records show that more people are looking at their credit records. The number of credit reports issued to consumers increased to 164,437. Of the total credit reports issued, 77.0% (126,591) were issued without charge, and the remaining 23.0% (37,846) were issued with charge. There were 21,466 disputes lodged on information held on consumer credit records for the quarter ended September 2013, an increase of 14.2% quarter-on-quarter and 39.8% year-on-year
 

Fraud Prevention Guidelines:

Heed the following advice if you are in the market for a personal loan:

  • Look at the official company to identify authentic products on offer.
  • Blue Financial Services warns that unprofessional advertisements containing any spelling, grammatical and alignment errors are generally an indicator of fraud. Also look out for images, logos and any other suspicious brand adaptations that look as if they were created and generated within the advertisement.
  • If you are suspicious about a website or call centre agent, don’t reveal any information.
  • Clientèle will never ask you to pay money in order to secure a loan.
  • Check if the contact details correspond with the details on the official website. If they don’t match then don’t contact them.
  • According to Blue Financial Services, if the email is not sent out from an IP address, which is traceable in South Africa, and it differs from electronic email addresses reflected on official website pages then this is also an indicator of fraud.

 

For more tips and advice about identifying scams and fraudulent activity, click here. If you have been a victim of fraud report the matter to the South African Police Service. Alert the South African Fraud Prevention Services (SAFPS) immediately on 0860 101 248. This will help to prevent further fraud being committed with your personal details.