Ouch: loan applicant paid out almost R59k in a scam

I’ve heard from many victims of loan scams, but never have I heard of someone being strung along by an “advance fee” scammer to this extent.

“David’s” email is an extreme cautionary tale.

They use money mules to open bank accounts for them, so their names are not attached to the bank accounts.

“I would like to bring to your attention a company that is scamming people by offering fake loans. This is the SMS that I received: peoplesfinance@consultant.com Apply for a loan of up to R250,000 at 6% interest rate. Call/WhatsApp 063 333 3360 to apply.

“Out of desperation as I needed money, I applied to them for a loan of R250,000 which they granted on condition that I paid R4,500 to fix my credit score before the loan could be transferred to my account. As this was part of the agreement, I paid the money. They went on to ask for another amount of R7,750 for insurance to cover the loan which I duly paid. I then received a link to an online bank site for Imperial Bank of SA. I was shown the loan amount and given a password to download the loan into my bank account, but when I tried to do this, it requested a transaction code.

“When I contacted Peoples Finance I was told that I had to pay R14,000 to obtain the transaction code. I did not have R14,000 and they reduced the amount and I foolishly paid R8,500. I was then told I would receive an ATM card to access the loan, but I had to pay R3,700 for courier costs, which I duly paid.

“I eventually received the card and I was told that I had to pay R25,000 to activate the loan. As I did not have R25,000 they cleverly tried to entice me by putting R400 in the ATM card and told me to withdraw the money. I was able to withdraw R360. I was then told that as I now had proof that the ATM card worked I needed to pay R19,700 to access the balance of the loan.

“As I did not have the money I told Peoples Finance that I no longer wanted their fake loan and to refund the money that I paid to them. I was told that I had to pay R1,500 for the refund documents. I paid the R1,500 but never received the so-called refund document.

“I persisted with my demand for a refund and was then told that I now had to pay R8,000 to get my refund. I refused and the amount dropped to R2,600.

“As I needed my money refunded I paid the R2,600 (his total paid was almost R59,000 at this point) but was told that as the money did not reflect in their bank account yesterday until late in the afternoon the refund could not be processed but would be done today and that I would not have to pay any more money. That the refund was a done deal.

“Then this morning I was advised by a Mr Williams that I now needed to either pay R9,700 to get the loan or another R3,200 to get my refund, which I did not pay.

“Needless to say, to date I have not received the fake loan or the refund of my money as was promised by Mr Williams, who said he was the office manager. Unfortunately I was desperate and hoped that they would honour their word.”

“The names of the people involved are: Sandra, who allegedly approved the loan, Mr Williams the office manager, as well as the people and the bank accounts to which I paid the money: Can you please investigate and expose them so that no-one else is scammed the way I have been.”

As I told David, these con artists are very difficult to track down as they shed and acquire cellphone numbers constantly and all their names are fake. (Williams is a very popular one, for some reason.) And they use money mules to open bank accounts for them, so their names are not attached to the bank accounts.

I did ask David how he managed to find more than R50,000 to pay these fraudsters, when he was applying for a loan because he was desperate for money, but he hasn’t responded.

His experience reveals that these fraudsters will literally keep on tapping you for more and ever creatively described fees until you wise up.

David’s wasn’t the only loan scam-themed email I received last week. I heard from Phillip:

“Good day Wendy, I need your advice I have applied for a loan with company called Halifax for amount of R5,000, they say I must pay a R900 attorney admin fee before they can transfer my loan amount. Is this legal?”

NO!

Bottom line — if you apply for a loan and you are asked to pay any form of upfront fee, it’s a SCAM.

As the National Credit Regulator (NCR) has repeatedly warned consumers, these types of scams come at a time when credit approvals have decreased and consumers are finding themselves extremely financially stretched, unable to qualify for legitimate loans.

Often they use the details of legitimate credit providers and attempt to make one believe they are endorsed by government agencies such as the NCR, one must not be misled and can look out for the typical signs.

How to avoid the scams:

Treat all unexpected calls, emails and sms messages with caution. Don’t assume they’re genuine, even if the person seems to know some basic information about you, such as your name.

Look out for the name on all emails, in case it is a “clone company” pretending to be a real credit provider.

The National Credit Act does not allow credit providers to request upfront payments for the release of a loan, if the “credit provider” makes this request, do not engage further and report to the relevant authorities, such as the NCR

Be aware of platforms and hidden fees included for sourcing a loan; don’t be pressured into acting quickly. A genuine credit provider won’t mind waiting if you want time to think and compare the costs of credit by using a quotation.

Do not engage with credit providers who do not conduct affordability assessments and are not registered with the NCR.

If you’re unsure about the legitimacy of a credit provider or agreement, contact the NCR on 011 554 2600/2700 or visit their website at www.ncr.org.za

• GET IN TOUCH: You can contact Wendy Knowler for advice with your consumer issues via e-mail: consumer@knowler.co.za or on Twitter: @wendyknowler.

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