Lending scams on the rise, says ASIC

ASIC issued the fresh warning yesterday after an increased number of recent reports from victims who have lost thousands of dollars from these scams.

“The scammers appear to be operating from overseas, and have impersonated genuine Australian companies and Australian credit licence holders,” the regulator said.

“After making a loan enquiry online, the victims generally receive a telephone call or email from the scammers advising them that they qualify for a loan, sometimes for a larger amount than they originally applied for.”

ASIC said victims are provided with fake loan contracts that look like legitimate contracts, and are often misled by the use of an Australian credit licence number or Australian company number belonging to genuine businesses that have no connection to the scam.

The scammers re-route foreign numbers to look like Australian phone numbers, which creates the impression they are located in Australia, ASIC explained.

“The scammers then tell the victims that they must pay insurance or fees for the loan before the loan can be provided, usually to Australian bank accounts set up for the purpose of receiving these payments.

“The deposits requested are often in the thousands, and can be as high as $5,400 per consumer. However, after victims make these payments, they never receive the loan," ASIC said.

ASIC said that legitimate lenders who are authorised under the credit laws in Australia will generally not request that any fees be paid upfront as these establishment costs are usually included in the loan and repaid over time.

"If you are asked to contribute fees or insurance costs before you are advanced any money under the loan, you should treat the proposed transaction with a great deal of suspicion. This is a classic warning sign of a scam," ASIC deputy chairman Peter Kell said.

"Consumers should always take steps to make sure they are dealing with a legitimate business by only dealing with those they can reach through publicly available contact details, rather than accepting unsolicited offers of credit from lenders.”

As the scammers are usually operating overseas, ASIC said it is generally unable to pursue this type of matter.