As the Covid-19 pandemic keeps rising, South Africans struggle to keep up with all their monthly expenses. Many people have lost their jobs over the past few months and those who have jobs are hanging on a financial thread. Providing a perfect feeding ground for money lenders. Dodgy loans sharks have infested South Africa with their urgent cash loan scams over the past few months. What does an urgent cash loan scam look like, and what should you watch out for?
Over the past few months, we’ve seen money lenders advertise through SMS and email. However, the victims of these scams never receive their loans as promised.
South Africans who fall, victims of these scams, are already in a vulnerable financial position.
The National Credit Regulator (NCR) has stressed that only businesses who are registered can provide loans to the public. In fact, taking money upfront before offering a loan is illegal.
Unfortunately, there are no quick-fix solutions to your damaged financial situation.
The best you can do is to review your financial situation and take action accordingly. If you’re struggling to find a solution, rather ask a professional financial advisor to assist you and guide your financial decision.
How can you avoid urgent cash loan scams during 2020?
What does a cash loan scam look like?
Most of these urgent cash loan scams offer large loan amounts but only require small upfront fees. Scammers impersonate well-known money lenders to seem like a legitimate business.
Once you pay the money upfront, the scammer avoids further contact and you never see the agreed-upon loan amount.
This is can really damage your financial situation if you’re not careful.
How do you know if it’s a scam?
The quickest way to figure out if you’re being scammed is to check if an advanced payment is required. If the answer is yes, you’re dealing with a scam.
A legitimate money lending company will disclose any upfront fees and include those fees in the loan amount.
Do not be fooled by their tricks.
Cash loan scam tricks to watch out for
1. The details are in the fine print
Most scammers make their money by hiding their fees in the fine print and legal jargon. If the loan agreement is too complicated for you to understand, ask questions until you completely understand the terms of the agreement.
If you don’t understand what you’re getting yourself into, don’t sign it.
2. Never pay upfront
A legitimate credit provider will never ask you to pay any upfront fees.
Many cash loan scams fool their victims by asking for upfront administration or processing fees. But, once these fees have been received these scammers make a run for it.
Leaving you in a worse financial position.
It is illegal for a money lender to ask for any upfront fees. Legitimate money lenders will include these fees into the loan agreement.
3. Pre-approved loans
How many SMS’s or emails have you received lately that claimed you were eligible for a pre-approved loan?
Scammers use this tactic to lure their victims in. But, these so-called ‘pre-approved loans’ are lies.
Registered credit providers will never approve you for a loan without running a full background check.
These institutions have to ensure that you are in good financial standing before they can approve your loan. And they can’t do that without the necessary information.
4. Protect your personal information
If anyone asks you to provide your personal information over the phone, rather just hang up. Even if it’s not a scam, you don’t need to give anyone your personal information.
Scammers attempt to fish out any personal information they can like getting your ID number, credit card details, ATM pin etc.
This information is valuable to you, so protect it.
Are you struggling financially?
If you are struggling financially there are better ways to deal with your financial situation than to make more debt.
The last thing you want to do is to make more debt and damage your financial situation even further.
If you’re struggling to make ends meet and pay all your debt repayments, you may be over-indebted.
There are a few options at your disposal that can help you cope with your financial situation.
We recommend debt review.
The debt review process was established by the National Credit Act (NCA) in 2007 to prevent South Africans from being blacklisted and the consequences thereof.
The debt review process is ideal if you’re employed and struggling to make ends meet.
If this is your current financial situation you may be over-indebted, and you’ll need some financial relief.
Debt review is the perfect solution.
The benefits of debt review
- Receive a personalized monthly budget.
- Only pay one single monthly debt repayment.
- Your debt counsellor will negotiate reduced monthly debt repayments.
- No more communication with credit providers. Your debt counsellor will take over on your behalf.
- Legal protection from credit providers.
Do you need financial relief?
You may need financial relief if…
- You’re overspending on your credit card.
- You’re falling behind on debt repayments.
- You don’t have enough money to cover all your monthly expenses.
- You’re selling assets to pay the bills.
- You’re struggling to sleep due to financial-related stress.
Debt review may help you get your finances back on track.
If you are struggling financially, contact Debt Rescue today. Fill in your contact information in the form below and we’ll get back to as soon as possible.