The Australian Securities and Investment Commission (ASIC) has warned borrowers about a lending scam via which some victims have lost in excess of $33,000 to illegitimate overseas lenders demanding upfront payments before advancing loans.
Borrowers are told that before a loan can be advanced, money for insurance, tax or other payments must be forwarded to a specified personal account or transferred to an overseas account using Western Union or similar wire services, according to ASIC. However, after borrowers make these payments, they never receive the loan.
ASIC Deputy Chairman Peter Kell said borrowers should never send upfront payments before receiving a loan or they would risk suffering significant financial loss.
"Legitimate lenders who are authorised under the credit laws in Australia will collect upfront costs out of the loan disbursements when the loan is advanced, in accordance with the terms of the loan contract. They never ask you to transfer money to a third party or an overseas account before a loan is drawn down," he said.
The scammers are believed to be operating from overseas and appear to have hacked the legitimate websites of some small lenders to target consumers.
These illegitimate lenders have also set up fake websites and internet banner ads offering fake loans.
Borrowers are misled by the inclusion of identifiers, such as Australian credit licence numbers and Australian Company Numbers, belonging to genuine licensees. The fake loan contracts look like legitimate contracts, but are often made in the name of an unregistered business or a company the scammers do not represent.
‘ASIC urges anyone who needs to borrow money to be mindful of these scams. Never deal with anyone you cannot reach through publicly available contact details," Kell said.
