When you are desperate, it is easy to make poor decisions. It is especially easy to believe someone who promises to make all your money troubles go away. Sadly, these promises are often scams, and instead of helping you, they leave you with an even bigger need to borrow money.
Fake credit providers are all too real in South Africa at the moment. Many people are struggling due to the economic impacts of Covid-19 and the consequences of not knowing enough to manage their money effectively. This combination gives fake credit providers a foot in the door.
Scamsters that promise you a loan in exchange for an upfront fee is nothing new, but they still do good business. Remember: a legitimate credit provider will never ask you for money before lending you money. All the fees and loan costs are included in the final loan amount. If someone wants you to hand over any cash before you can get a loan, stop the conversation, and walk away.
A more recent scam is the promise to clear your record at the credit bureau for a fee. The truth is that there is no quick-fix to a bad debt or credit record. No unauthorised company or person – not even a lawyer – can remove negative data from the credit bureau records, no matter how much you pay them.
Scams usually have common characteristics. Here are signs that the “credit provider” is not honest with you:
Now that you know what to look out for, here are four tips to follow if you are thinking about taking out a loan or getting help to rehabilitate your credit record: