The offer of a loan at an interest rate of just 2% per annum looked suspicious from the start, mainly because no one in South Africa would offer a loan at 2% with a prime overdraft rate of 9%.
Second, the offer came in the form of an unsolicited SMS without identifying the sender.
The additional information was just a WhatsApp message, with spelling, punctuation and grammatical errors that removed any doubt that this attractive loan offer was fake.
“Cash Loan Company Limited is a legitimate and well-known South African and British loan company based in South Africa and the United Kingdom,” it announced, but uses a Google mailing address and has no website.
Read:
“We offer loans to both individuals and organizations that intend to carry out reconstruction of houses and institutions, debt consolidation, refinancing, as well as the creation of enterprises. We issue our loan in USD and GBP, Rand and any currency of your choice.
“Blacklist can apply, no credit check, debt review or court order can apply. The ITC may apply,” said a lengthy message signed by Mr. Jackson.
The message asked for my ID number, position, first name, last name, phone number, address, loan amount, loan term, monthly income, salary payment date, monthly expenses, and occupation.
No verification
Apparently, Jackson was only satisfied with a partial name, a fake ID number one digit short of a potentially real one, my occupation, and what I told him my salary was. He didn’t ask me the name of my employer or why I forgot to send a list of my monthly expenses.
The fact that the loan was approved within 30 minutes serves as proof that Cash Loan Company Limited is not in the business of issuing loans.
Within an hour of receiving the first SMS, Jackson laid out a long list of rules in the National Credit Act (NCA) – the most important of which relate to the need to carry out proper credit checks on applicants and ensure they can afford the loan they are offered.
Jackson did not have enough information to run a credit check, nor did he ask for a copy of his pay stub or proof of identity and address.
He “confirmed” that Cash Loan Company Limited is registered as an authorized lender as required by the NCA, but could not provide a registration number.
The National Credit Act applies to all credit agreements between consumers and any credit provider in South Africa, whether it is a personal loan, store credit, credit card, microloan or mortgage bond. Some sections even apply to a pawnbroker who lends money against valuables.
Any person who offers credit to a consumer or lends money must be registered as a creditor with the National Credit Regulatory Authority. Unregistered individuals or legal entities may not offer loans or other forms of credit.
Scam
The scam behind the 2% loan offer was predictable. I had to pay an upfront fee of 1,550 rand before I could get the 10,000 rand loan.
“Congratulations on your successful approval. Please send us your bank details where you want to transfer the loan money and also tell us the easy way for you to send the commission now and keep in mind that the commission you pay now will be returned to your loan when the money is transferred for you now Jackson wrote.
The “loan document” explained the fee terms: “With respect to the preparation of the security documents, the agreement and the attorney shall act only in the interest of the borrower/charger, and the attorney’s fee shall be in accordance with the applicable scale of the specified fee based on the amount secured or financed.
“A processing fee of R1,550 must be paid by the other party to initiate due diligence, prepare security documents, agreements and credit documentation, all requested information provided and satisfactorily monitored.”
Another WhatsApp message asked for the administration fee to be deposited into an FNB bank account owned by an individual Nengawhela Livhuwani, not the Cash Loan Company’s bank account, adding that “when you make a transfer, it should be an instant payment”.
FNB
Moneyweb requested a bank account from FNB, outlining the context of the request. A spokesperson responded that FNB is committed to investigating every allegation of fraud in line with its zero-tolerance approach to crime.
“This is in line with our commitment to ensure that all our bank accounts are used and managed in accordance with all relevant laws. We encourage any victim of suspected fraud to report such incidents immediately through our fraud contact center or any of our banking channels.
“Furthermore, we encourage the aggrieved party to file a criminal complaint with the appropriate law enforcement agency,” FNB said.
While FNB said it could not disclose information regarding specific bank accounts, it acted immediately on evidence of criminality.
Apparently FNB saw something was wrong and closed the account because Jackson sent new details to pay the administration fee the next morning.
This account belonged to another person.
In a phone call, Jackson explained that the account information had changed because “the first agent was unavailable.” He was upset when he was called.
“Since you thought it was a joke, I’m going to try to report you the same way you said you reported our first bank account,” he wrote in a recent post.
Errors
It is hard to understand that people fall for such scams. The countless errors in the messages and documents clearly indicate that something is wrong.
Read: Moneyweb Reader Confused About Falling For Crypto Scam
Jackson’s document, which was supposed to serve as a loan agreement, had major errors. For example, the document states that a loan of 10,000 rubles was to be repaid within one year, with a total of 108 monthly payments of 842.39 rubles. Immediately after this miscalculation, another claims that there are 108 monthly payments of 108.66 rand and a final payment of 10,108.66 rand.
Exposure
Source: Cash Loan Company Limited
Fraudsters are likely still making money despite warnings from banks and other financial institutions, the Reserve Bank of SA, the Financial Sector Conduct Authority (FSCA) and consumer organisations.
Scammers wouldn’t enter hours if they didn’t make money.
And there are hundreds of them. In just two days, I received loan offers from dubious organizations and individuals posing as well-known financial organizations.
These included a Covid-19 relief loan from Sanlam and low interest loans from Recharge Finance, Everest Finance, Moneyspot Finance, Sanlam Finance (again), CashWorld, DirectAxis and DNR Cash Loans.
A lot of documentation coming from different sources looks so similar that it probably comes from the same place. Can I buy a franchise in the fake loan industry?
