Commissioner's blog: Personal loan scams

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With Acting Consumer Protection Commissioner David Hillyard

The economic downturn in WA is creating opportunities for heartless scammers to take money from people in desperate circumstances who are least able to afford it.

Consumer Protection has received reports from a number of people recently who have fallen victim to personal loan scams and have given personal information which could lead to identity fraud in the future.

The loan scam involves people receiving phone calls or emails out of the blue from fraudsters claiming to be from finance companies Credit ReStore and BBM Finance. They ask for an insurance fee upfront as part of the ‘application process’ but the money never turns up and communication ceases. Toward the end of 2016, three victims reported losing a total of $3,750, making the tally for that year more than six victims losing $6,300. We've already received a number of new reports of victims so far in 2017.

Our investigators contacted the Director for Credit Restore and a BBM Finance representative who confirmed that Credit ReStore credit repair service in South Australia has not been trading for about six years and has never offered personal loans. BBM Finance in Victoria has never officially traded and had been set up as a venture which had not come to fruition.

If you’re looking for or applying for loans online or using comparison sites, you need to do some research into the lender before sharing your personal information. Ensure the site is secure showing a padlock (and prefix https://). Also make sure your anti-virus and spyware prevention software is up-to-date and working, otherwise scammers could hack into your computer or device and monitor your online activity and emails. Be careful not to click random links or pop-up ads.

There are many things to consider when applying for a loan, including:

  • Check the lender is licensed by looking on the Australian Securities and Investments Commissioner (ASIC) website BUT remember that scammers also have access to this information and can copy the details of a registered credit provider in order to pretend to be them.
  • Verify that any phone number or email address you are using to communicate with a lender truly belongs to the registered company you think you are dealing with. Just because a phone number begins with an Australian prefix does not mean the person you are talking to is based in this country – they could be re-routing the number using technology known as VoIP.
  • Be very suspicious about requests to pay fees upfront that involve wire transferring the money or putting it into bank accounts. Get advice from Consumer Protection (1300 30 40 54) or ASIC (1300 300 630) before going ahead. 
  • When sending emails type the address into your ‘To’ box rather than hitting reply to prevent conversations with hackers.
  • Know that clicking on links in emails or clicking on online advertisements may take you to fake websites.
  • There is also good advice on ASIC’s MoneySmart website
Commissioner for Consumer Protection David Hillyard
Commissioner for Consumer Protection David Hillyard, by CP Media
David Hillyard, Acting Commissioner, by CP Media


Consumer Protection
Department News
09 Jan 2017

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