Personal Loans Warning – Don’t Get Scammed!

Increasingly at Rate Detective we are finding people who are coming to us seeking a legitimate loan after being scammed or having a near scam experience.

Sadly for many of these people, the scamming has sent them into debt and they have to seek finance to get themselves back on a level footing.

In light of this, and as an industry insider of many years standing, I thought it might be a good idea to let everyone reading know how to recognise, and thus avoid personal loan scams.

I suppose the first piece of advice I can give you is to always make sure you are approaching a company for a loan and not the other way around. When you do the approach you can quickly see such things as:

  • Does the company have a physical address in Australia?
  • Can you call a landline number and speak to someone at the company?
  • Is the company registered in Australia and do they have an Australian Company Number, what is it?
  • Does the company have an Australian Credit License and what is their licence number?

Most of this information should be easy to find, or for the company you’re thinking of dealing with to provide, it should all be at their fingertips, as it is here at Rate Detective. The first warning sign I’d look for is any resistance or evasiveness to a request for this information, stop dealing with the company immediately.

However it’s not so much the companies that you approach that will be the problem; most that advertise through legitimate channels are genuine and traceable.


Typically these scam companies will approach you directly and unrequested by phone and email. Basically they trawl looking for vulnerable people, pensioners, students, single mums etc., effectively anyone they think might be a target for a loan scam.

What they offer

Essentially they offer you the world:

  • Interest rates like 2%, well below market rates which are to a maximum of 4% per month but usually 10 to 20 % annually.
  • Non repayment period, where you make no repayments for a year or more
  • Immediate approval
  • Money back guarantees and the right to cancel at any time
  • No credit history check if you have a bad credit history

Basically it will all sound too good to be true, and that’s because it is!

What they ask for

  • Typically they will ask you to pay a “service fee”, taxes, surcharges, processing fees etc., before they can process the loan amount
  • If you pay anything they will quickly ask you to pay another mysterious charge
  • They provide foreign bank account numbers to pay the “fees” into
  • They ask you to make a quick decision, saying you will miss out if you don’t

Now a lot of those point s seem very obvious but you would be amazed at how many people have been scammed and continue to pay a scammer after the first payment, because they get told that if they don’t they will lose their initial payments.


You will never again see any money you pay to a loan scam, forget the money you’ve already paid and stop paying anymore immediately.

As you can see the world of scammers is alive and well and looking for their next victim. The main thing is to make sure that next victim is not you!

If you think a loan scammer has tried to contact you report their activities to ASIC on 1300 300 630

To get impartial, objective advice on the appropriate personal loan for yourself, contact one of our friendly Rate Detective consultants today. We only deal with fully accredited legitimate lenders, who are put through a rigorous qualification process before we allow them to offer services through Rate Detective.

Published on July 7-th, 2014 in Personal Loans
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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