Spot the scam

2014-03-30 14:00

As the cost of living continues to rise, you may be tempted to take out a personal loan. Whatever your reason, whether it’s to renovate your home or make a few changes before the winter chill sets in, make sure you know what you’re getting yourself into

City Press reader Mandla from Port Elizabeth recently had a nasty experience with a company called Halifax Loans and ended up losing money to the tune of R9?980. It turns out Mandla was scammed and instead of receiving a loan, he was fleeced.

Mandla had applied for a loan of R160?000. He says: “I was asked to pay R3?450 to their attorney and I did that. Later, I was asked to pay R6?530 in transfer fees and I did that. Now I have been asked to pay R10?200 as taxation fees. Is this a scam or the way things happen?”

At this point, Mandla asked the consultant he was dealing with to email him the terms and conditions of the loan as well as a copy of the loan agreement, but this never arrived.

The National Credit Regulator confirmed to City Press that Halifax Loans is not and has never been a registered credit provider. Under the National Credit Act, a credit provider is required to be registered with the regulator.

In addition, a credit provider is not allowed to charge you for legal costs or taxation fees under a credit agreement.

The regulator’s manager for investigations and enforcement, Nthupang Magolego, says: “Halifax [if it is indeed in the business of granting credit] is not following the provisions of the act when it comes to costs of credit, based on the information provided by Mandla.”

Mandla has two options for recourse. If he actually received a credit loan from Halifax, the company is bound by the provisions of the act and the case can be investigated by the regulator.

“Depending on the outcome of the investigation, Mandla may be refunded the money paid over to Halifax,” says Magolego.

But if Mandla simply made payments to Halifax without receiving any credit or personal loan, it would be classified as a scam and will have to be reported to the police as a matter for criminal investigation. CEO Kevin Hurwitz says there has been a plethora of personal loan scams over the past six months. In January, Wonga became aware of scammers purporting to be representing them and offering consumers fake loans with unrealistic interest rates.

“Typically, once the consumer contacts the scammer, they are asked to provide their personal information and deposit various amounts of money into different private bank accounts.

“This continues with repeated requests for advance fees and the victim never receives the loan funds,” he says.

Hurwitz confirmed Wonga did not offer business loans and the only way to apply for a real loan was via the website and never by email or SMS.

Wonga also offers a maximum loan of R2?500 for first-time customers.

He adds Wonga will never request any upfront payment for a loan. “The fees we charge are all in line with the act and are payable on the customer’s due date.

These fees are clearly shown on the home page, along with the total cost of the loan, before customers sign up for their loan,” he explains.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Book flights

Compare, Book, Fly

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.