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Credit regulator warns cash-strapped public of credit scam

Criminals have spotted an opportunity to exploit vulnerable people by posing as legitimate registered credit providers and offering loans with a condition of an “upfront payment”.

THE National Credit Regulator (NCR) has urged consumers to be careful of fake credit provider scams, as South Africa continues the fight against the COVID-19 pandemic.

“The NCR is warning consumers to be careful of scammers who act as legitimate credit providers, preying on vulnerable consumers during this period of COVID-19 pandemic. The impact of this pandemic has unfortunately left many consumers desperate for money with some having to resort to borrowing,” said the NCR Chief Executive Officer, Nomsa Motshegare.

She said criminals have spotted an opportunity to exploit vulnerable people by posing as legitimate registered credit providers and offering loans with a condition of an “upfront payment”.

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“The NCR has, during this period, been receiving queries from consumers about unregistered companies posing as registered credit providers, offering them loans via SMS and email. These scammers use the registration details of lawfully registered credit providers, inform consumers that the loan is approved and before the loan is paid out, they demand an upfront payment from the consumers.

“Once consumers pay this upfront payment, the scammers will disappear with no trace and no loan will be paid out to the consumer,” Motshegare said.

According to the National Credit Act (NCA), an upfront payment for a loan is unlawful and not allowed.

Those who have fallen victim to this scam and have paid upfront fees should open criminal cases at their nearest South African Police Service (SAPS).

All registered credit providers’ details are listed on the NCR website www.ncr.org.za.

 

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