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ASIC Warns Borrowers About Lending Scams

ADF Financial Services Consumer Centre
15th December, 2015

Early last month ASIC warned borrowers about a number of scammers asking consumers to make upfront payments for loans that are never provided.

ASIC says victims in total have lost many thousands of dollars.

The thieves appear to be operating overseas and impersonate genuine Australian companies and legitimate credit providers.

Here’s how it typically works – you make an online enquiry about a loan and then receive a phone call or email stating that you qualify for a loan for an amount that is sometimes higher than what you had applied for. You are given fake loan contracts that appear legitimate. The scammers re-route Australian phone numbers to provide added sincerity.

Here’s how they get money out of some victims – before the loan can be finalised, insurance or other establishment fees must be paid to an Australian bank account. These costs can be as high as $5,400 per customer.

Once the fee has been paid no loan is received.

How to avoid get caught by these types of scams?

ASIC suggests the following tips:

  • Only deal with reputable online institutions
  • Do your background checks, but be aware that scammers can pretend to be a licensed credit provider located in Australia.
  • Be very suspicious of any requests for upfront payment, even if making a deposit into an Australian bank account.

ASIC’s MoneySmart website has more tips on how to recognise a loan scam-https://www.moneysmart.gov.au/scams/banking-and-credit-card-scams/loan-scams

ADF Financial Services Consumer Centre

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