Personal Loan Safety Guide: Avoid Scams and Fraud

At Auto and General, we’ve seen our fair share of financial scams in our over 40years of experience. It is important to us to assist South Africans in making financial decisions that help rather than hurt them. That’s why we have put together a list of warning signs of personal loan scams and how you can tell the difference between us and the fraudsters.

Red Flags That Indicate a Fake Personal Loan Offer

There are many warning signs to look out for in personal loan scams. You can trust that Auto and General will never do any of these.

• Incorrect email address: Scammers often use generic email addresses, such as Gmail, Yahoo, or Hotmail, rather than a company address.

• Asking for money up front: Criminals may ask you to pay fees up front. Auto and General includes all policy and admin fees in your monthly repayments.

• Overly generous loans: Personal loans exceeding R250,000 are rare, and we don’t offer you more than this amount.

• Improper language: A fake offer or website may have numerous spelling and grammar errors. At Auto and General, we pride ourselves on offering a professional service to our customers, which includes clear and accurate communication.

• Messy logo: Because a criminal may pretend to be a legitimate financial services provider, they might copy a company’s logo; this will often appear blurry or squashed. We only use high-definition images of our logo.

Steps to Verify a Legitimate Loan Provider

• Research the company online: Learn more about your chosen loan provider. Look for accreditation, reviews, complaints, or scam reports on forums and consumer websites. 

• Verify contact details: Legitimate lenders will have a physical address, professional email, and a verified phone number. You can also call them directly to ensure you’re speaking with a trusted source.

• Check website security: Your chosen loan provider should have a working website with clear privacy and data policies. Look for the “https” to ensure it’s secure. 

• Read the terms and conditions: Always read the terms and conditions whenever you take out a personal loan. With legitimate companies, these protect you and are heavily regulated by the law. We understand that reading them can be time-consuming, but this is often where scammers hide fees that you unwittingly agree to.

• Trust your gut: When all else fails, if something feels off or too good to be true, walk away. 

Why Scammers Target Personal Loans in South Africa

Many South Africans are facing financial difficulties and are seeking quick cash solutions. With the cost of living increasing, job uncertainty, and limited access to credit, people can fall prey to enticing personal loan offers. Fraudsters will exploit this vulnerability and offer low-interest loans with a promise of quick approval. However, the catch is an upfront “processing” or “administrative” fee. Once you’ve given them your money, they’ll disappear. 

These scams can appear on social media, fake websites, and even over WhatsApp, with all the tricks and tools to appear credible. It’s imperative that you be aware of the personal loan scams taking place so that you can protect yourself from deception. A genuine lending institution will be registered and will not ask for upfront fees.

How Auto and General Protects Customers from Loan Fraud

If you encounter any of the warning signs when considering a personal loan through Auto and General, please contact us immediately on 0861 877 775 so that we can investigate and take legal action against the criminals.

Auto and General loans are administered and provided by RCS, a registered credit and financial services provider.