The news is full of warnings to consumers to be vigilant about getting into debt. However, the truth is that many South Africans don’t qualify for a personal loan from the bank, but urgently need to borrow money.

You just need to visit Google and type in ‘loan’ or ‘personal loans’ in order to see the quick fixes coming in; these ads offer all sorts of convenient, instant and easy fixes to your financial issues.

The more worldly-wise will know their scams from their legitimate companies, but there are many who will get sucked in, only to end up as the victims of fraud and far poorer than they were in the beginning.

You can avoid getting exploited by loan sharks with the following tips: 

• If a company says ‘no credit checks done’, ‘blacklisted welcome’, ‘bad credit welcome’ or ‘free credit’, then they are operating illegally. Legitimate companies need to be registered with the National Credit Regulator (NCR) and they legally need to conduct affordability assessments on anyone applying for a loan.
• Never give your bank details to an unknown brand or marketing company via a website, on the phone or via SMS.
  • Always read the terms and conditions before you sign anything. Scams often have lots of extras buried in the T&Cs that you will end up having to pay for.
  • If you are blacklisted, don’t attempt to take out a loan. Any legal institution will deny the loan, so whoever agrees to give it to you is doing so illegally. These scams are run by people who take advantage of those who are desperate. Rather speak to your bank and get advice on the best way forward.
  • Ignore any SMS’s or emails offering low interest, ‘guaranteed’ personal loans. These are likely scams and should be avoided.
  • If a ‘loan provider’ operates from a Gmail, Hotmail or any other personal email account, then avoid.
  • Never pay anyone to find you a loan. This is illegal.

The best thing is to adjust your spending altogether so that you are living within the boundaries of what you can afford. Follow this by paying off your debt and putting together a budget that you can stick to. But if you find yourself too deep in debt and can’t see a way to pay it off, consider a debt counsellor. There are many around the country who can help with advice on becoming financially healthy and set you on the right pathbefore you sign any ‘loan’ agreements.

If you have fallen victim to one of these scams, complain in writing to the Credit Ombudsman at [email protected].