Beware of loan scams in these tough economic times

The National Credit Regulator (NCR) is warning the public of falling victim to loan scams. Photo: Pixabay.

The National Credit Regulator is warning the public against fake loan scams that are becoming more and more prevalent.

The National Credit Regulator (NCR) has released a statement warning the public to be wary of fake credit providers that offer loans to consumers.

Manager of Investigations and Enforcement at the regulator Jacqueline Peters said that these scams usually target individuals that are in distressed financial circumstances.

The scams usually use slogans such as ‘blacklisted’ or ‘debt review clients welcome’ to lure clients.

The National Credit Act prohibits all advertisements for credit from utilising these slogans. The regulator urges consumers to avoid engaging with any credit provider who advertises in this manner.

This warning comes at a time when these scams are on the rise due to the decreased levels of credit approvals.

Now is the time to be more vigilant, according to the regulator, and they advise people to make wise decisions, especially in vulnerable times.

They acknowledge that consumers are finding themselves in dire financial situations but still expect them to avoid these scams.

The National Credit Regulator has shared the following tips to help consumers avoid scams:

  • Never borrow from an unregistered credit provider
  • Treat all unexpected calls, emails and SMS messages with caution – don’t assume they’re genuine, even if the person seems to know your basic information, 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
    n Do not pay any upfront fees to release your loans. 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, report the matter to the relevant authorities such as the National Credit Regulator or the police
    n Be aware of platforms and hidden fees included for sourcing a loan
    n Don’t be pressured into acting quickly – a genuine credit provider won’t mind waiting if you want time to think about and compare the costs of credit by requestion a quotation
    n Do not engage with credit providers who do not conduct affordability assessments.

The regulator would also like to remind consumers to never give false or incorrect information regarding their financial affairs on a credit application, this includes fully disclosing financial obligations and living expenses.

If a consumer is unsure or in doubt about the legitimacy of the credit provider or agreement, they should contact the National Credit Regulator.

Details: National Credit Regulator www.ncr.org.za; 011 554 2600/2700.

  AUTHOR
Andile Dlodlo

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