Loan Scams and How to Avoid In Australia

According to the Australian Banking Association, 239,000 scams were reported in 2022, with 12% resulting in a financial loss. Unfortunately, in times of crisis, scammers use difficult situations to their advantage to target vulnerable Australians with different types of scams, such as loan scams or other types of financial fraud. If you are seeking a personal loan and afraid of getting hit with loan scams, read on to find out how Fundo can help!

If you aren’t seeking a personal loan, one of the biggest personal loan frauds/ loan scams happens to those who aren’t even in the market for a loan. If your personal data is stolen, whether that’s through another scam, hack or leak – an individual can apply for a loan on your behalf and get the money deposited into their bank account. The financial institution where the loan was issued will then chase you for the repayments of a loan you didn’t even know existed. The impacts of this type of scam can be devastating – essentially, you are the victim of identity fraud tied up in a loan scam.

If the scammer opens personal loan accounts in your name and defaults on them, you’ll get a negative credit report and if this is not reported soon enough it may stay on your record for up to 5 years.

This will impact your ability to get access to ANY sort of financial product in the future. The best way to prevent this type of scam is to regularly check your credit report – if there is an enquiry you don’t recognise, you must report it right away.

How will I know if a lender is offering legit financial products or potentially offering loan scams?

A legitimate lender in Australia must be licensed by ASIC, or be a representative of a licensee. It should be easy to find the Credit License number on the lender’s website or documentation. You can search for the Australian Credit License number on the ASIC website to check that the provider is appropriately registered.
If you are satisfied that the lender is licensed, it is also a good idea to review their website to ensure there are not any unsubstantiated claims such as a guarantee of approval, and that they disclose the fees and charges up front. You can also review customer feedback such as reviews left with trusted partners such as Google or Product Review.

What do I do if I get hit with a loan scam?

The first thing to do if you are hit with a loan scam is to cease all contact with the potential scammer and then contact your bank directly on a known phone number, and advise them of the situation. Depending on your bank, they may have a Fraud or Security team that offers services or support for you if you have been the victim of a scam. They may offer you advice such as to change your passwords, or cancel and re-issue debit or credit cards. In some cases if you have reached out to the bank or financial institution fast enough, they may be able to stop the transaction or put certain holds or securities in place to protect you from further losses. The type of scam and how you were scammed will affect how and if you can recover the funds.

 

How do I know if a lender is safe?

We touched on this a little earlier, how you can make some checks to ensure that you are not entering into a scam, such as checking out their website, confirming they are registered with ASIC, and reviewing public customer feedback – other ways to check if a lender is safe is to give them a call and ask them some questions. They should be able to confidently assist you with any enquiries you have about the application and approval process.

Can you get your money back if I have been hit with a loan scam?
Getting your money back from a loan scam can be difficult if not impossible, but there is help available. In the first instance, contact your bank or financial institution as they may be able you recover your funds, depending on the type of scam. If you have made a transfer to another account, they may be able stop or recall the transaction, but if you have purchased a gift card and provided the details, the loss may not be able to be recovered easily

 

How can I protect myself from a loan scam?

You can protect yourself from loan scams by doing your research before applying for any type of loan, and being certain that any businesses that you provide with your personal details are safe to share with. Change your passwords frequently and enable 2 factor authentication when it is available to prevent unauthorised users from accessing your data.

 

What To Look For In A Trustworthy Loan Company

So, you’re in the market for a personal loan and want to know the tell tail signs of a trustworthy lender?

The most telling sign that a lender is trustworthy is if they have a registered ABN and ACN – all financial companies in Australia are also required to be registered with ASIC. Visit their website and use their lookup feature to see if the lender you are dealing with appears.

Fundo is making small personal loans easy – get access to $5000 in a short time frame with flexible repayment options. We want you to Enjoy Now and Pay Later. With thousands of 5-star reviews – you can be sure to trust the passionate team at Fundo. Visit our FAQ page to learn more about how we are helping Australians nationwide.

 

FAQ

How do I qualify for a loan?

Qualifying for a loan depends on several factors, such as your: income/employment status, residency status, expenses, and other such factors.

To be eligible to apply for a loan with Fundo, you must be an Australian resident for tax purposes, at least 18 years of age and earning $500 per week from a Job.

 

How can I get approved for a personal loan?

You need to meet the eligibility criteria set by the lender in order to be approved. Factors such as your credit standing, along with previous repayment history with Fundo or other creditors will be considered when your application is decided upon.

 

What disqualifies you from getting a loan?

One of the most common reasons for disqualifying from getting a loan is bad credit history, low credit score or high debt-to-income ratio. There are also some lenders such as Fundo who make their assessments based on more than the credit file, so ensure to research the right lender and product for your financial situation.

 

How can I get approved for a loan quickly?

If you maintain a good credit score, keep a good bank balance, have a good salary, have the necessary documents, and apply for the right financial product, this can improve your chances of meeting the criteria for approval.

 

What are my repayments going to be?

The repayments will depend on the loan type, your pay cycle, the amount you have borrowed and any other special terms you have agreed to – it won’t be the same for everyone as each person has a different financial situation

 

Disclaimer: The opinions expressed in the Blog are for general informational and entertainment purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific investment product. It is only intended to provide education about the financial industry.  The views reflected in the commentary are subject to change at any time without notice.