Consumers are being warned about a growing wave of personal loan scams, where fraudsters pose as brokers and financial service providers to target unsuspecting borrowers.
How does this scam work
According to Scamwatch, these Personal loan scams typically begin when fraudsters pose as legitimate lenders or brokers, promoting attractive loan offers through fake websites, social media ads, or direct contact. After a victim submits an application, the scammer will get in contact via email or social media.
The victim is then asked to provide sensitive personal information and documents including photo ID, payslips, bank statements, and login details for bank and myGov accounts, which can later be used for identity theft.
Scammers often send official looking loan contracts and may even impersonate existing Australian credit licence and financial service licence holders. They may even fraudulently quote ABN registration and credit licence information from ASIC to appear genuine.
Before any funds are released, the victim is told to pay an upfront fee, often described as insurance or establishment fees, with false assurances that this payment will be refunded after three months. Once the payment is made, the scammer disappears, no loan is ever provided, and the victim is left both financially and personally exposed.
Who is most at risk
Anyone searching for a loan provider may encounter these scams. People experiencing financial hardship are also considered particularly vulnerable, as they may be more likely to seek urgent financial assistance and respond to seemingly attractive loan offers.
What to look out for
Scamwatch has outlined several warning signs:
- Communications that ask for your personal details and identification documents.
- Requests for upfront insurance payments that must be paid before loan funds are released.
- Requests to pay funds to a personal bank account.
- The loan provider is not licensed and does not appear on ASIC’s professional registers.
- The loan provider appears on ASIC’s investor alert list.
- Pressure to make payments and to pay in a particular way.
- Claims that insurance premium payments will be refunded after three months.
How to protect yourself
Remember to Stop, Check, Protect.
Stop - Scammers create a sense of urgency. Don’t rush to make decisions about money or about sharing personal details. Don’t let anyone pressure you into immediate action. Trust your instincts if something feels wrong.
Check - Always verify who you’re really dealing with before taking any action. Check the organisation is licensed by searching ASIC’s professional registers. Even if the organisation is licensed with ASIC and you’ve been given ASIC company registration and licence details, check the contact by calling the organisation using a number you source yourself. Visit the Moneysmart website to check ASIC’s investor alert list. Before sending any money, check that the account name matches who you intend to send it to.
Protect - If you’ve given money or personal information to someone you suspect is a scammer, act quickly. Find out more below.
What to do if you’ve been scammed
The sooner you take action, the better you can protect yourself and others from scammers.
- If you believe you may have been a victim or lost money to a scam, it’s important to notify your financial institution as soon as possible.
- Australian Mutual Bank members can speak to our Fraud Team by calling 13 61 91 (Monday to Friday 8:00am - 7:00pm, Saturday 8:30am - 11:30am, Sydney time) or by emailing info@australianmutual.bank.
- Change passwords/passphrases and security details if you think they’ve been compromised.
- Monitor your bank statements and credit reports for unusual activity.
- Seek support from IDCARE (a free government-funded service) who can help you develop a response plan to limit the damage. IDCARE will never contact you out of the blue.
- Help others and keep authorities in the know by reporting the scam to Scamwatch. You should also report the scam to the platform where the scam is happening (where applicable).
- Beware of follow up scams, particularly ones promising to help you get your money back. One in three victims of a scam have been scammed more than once according to Scamwatch.
- If you or someone you know has been impacted and may need ongoing help, there are support services available. These avenues of support are available to help, listen and believe.
- For more advice on how to avoid scams and what to do if you or someone you know is a victim of a scam, see our Security Advice section or visit the Scamwatch website at scamwatch.gov.au.
Customer-owned banks are dedicated to safeguarding their customers from scams and fraud and joined forces to launch the Scam-Safe Accord with the Australian Banking Association. This industry-wide initiative represents a united front against scammers and reinforces the banking sector's determination to strengthen consumer protection. Find out more about the Scam-Safe Accord here.
Source: https://www.scamwatch.gov.au/about-us/news-and-alerts/scam-alert-personal-loan-scams
Any advice or information in this article does not take into account your personal objectives, financial situation or needs and you should consider whether it is appropriate for you.
