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NCR warns: Beware fake credit providers

By Staff Writer
The National Credit Regulator (NCR) warned consumers to beware of fake credit providers. The regulator said tell-tale signs of fake credit offers often entail offering consumers a personal loan at a very low interest rate (often lower than the average).
 
Generally, consumers will be contacted by fraudulent credit providers via email or SMS. Once you have agreed to take out a personal loan with them, they demand an advance payment.
 
Takalani Mudau, acting manager of the NCR complaints department said: "It has come to the attention of the NCR that most of these fake credit providers are based in Port Elizabeth, Cape Town, Durban and East London and their email addresses contain domains such as yahoo.com; webmail.co.za; .co.uk; @admin.in.th; @manager.in.th. They always promise charging an interest rate of not more than 5% per annum."
 
The NCR is also concerned about desperate consumers who scour the internet looking for credit providers who offer personal loans to 'blacklisted' consumers. These consumers are the ideal victims for these scammers, as they are actively searching for a cheap loan, and will therefore most likely believe in what the fake credit providers are offering.
 
The advertisements that will likely catch these consumers' attention are those with the words 'no credit checks required', 'free credit', and 'cheap credit'. Madau stressed: "It is illegal in terms of the National Credit Act to use these words in advertising credit."
 
For more information on being 'blacklisted', click here.
 
How do fake credit providers operate?
 
The fake providers typically operate in the following manner:
 
  • 1.One of the main things to look out for is that all communication will take place via email or SMS. The initial contact with the credit provider will be through electronic means, with the lure for consumers being a cheap loan.
  • 2.The application process is then completed via email. The application forms appear to be legitimate, and may even have NCR registration numbers on them. To further enhance their 'credibility', these fake credit providers make use of the registration information of lawfully registered credit providers.
  • 3.Once you have filled out all the paperwork for the application, you receive a loan approval letter via email. In the email it is requested that you pay fees in advance and these will be described as 'clearance' or 'administrative' fees. Once this payment has been made, the fake credit providers ask for additional payments.
  • 4.After going through this process, consumers won't receive their funds, while the fake credit providers have made off with all their money.
 
How to identify a fake credit provider:
 
  • If it seems too good to be true, it probably is. Do research on the credit provider who is offering you the loan. If it is a company you have never heard of, rather walk away from the deal.
  • The NCR highlights that consumers need to pay attention to the domain names. If the website or email address makes use of yahoo.com; webmail.co.za; .co.uk; @admin.in.th; or @manager.in.th be cautious. Legitimate credit providers would most probably not make use of a Yahoo email address.
  • You are not required to make upfront payments to receive a loan. According to the National Credit Act, consumers do not have to make payments to credit providers to release loans. If a credit provider is asking you to pay funds up front in order to receive your loan, don't do it.
  • If a credit provider is advertising that no credit check is required then walk away. Credit providers are required to carry out credit checks and affordability assessments by law before granting a loan to ensure that you are suitable and will be able to pay back the loan.
 
If you have fallen victim to a fake credit provider, the NCR urges consumers to report the incident to their local authorities.
 
If you have further queries or concerns, contact the NCR on 0860 627 627 or www.ncr.org.za.

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