Personal loan scams in Australia: upfront fees, fake lenders and identity theft

The most common personal loan scam in Australia asks you to pay a fee before the loan is released — called an insurance, processing, "guarantee" or first-repayment fee — and then the money never arrives. Other scams impersonate real lenders, offer "guaranteed approval regardless of credit", or use a fake loan application to steal your identity documents and bank logins. A legitimate Australian lender will not guarantee approval before assessing you, and will normally deduct fees from the loan or add them to it rather than ask for payment upfront by gift card, cryptocurrency or a transfer to a personal account. Check that any lender or broker holds an Australian credit licence on ASIC's professional registers before you share documents.

This guide is part of personal loan mistakes to avoid. It describes common patterns, not specific businesses.

Common types of loan scam

Ten warning signs

1. You are asked to pay before the loan is paid to you.
2. Payment is requested by gift card, cryptocurrency, money transfer service or into a personal account.
3. Approval is guaranteed before any credit or income check.
4. The lender contacted you out of the blue by text, social media or phone.
5. You are pressured to act today.
6. You are asked for passwords, one-time passcodes or remote access to your device.
7. The lender has no Australian credit licence number or the number does not match the business name.
8. The website or email address is slightly different from the real lender's.
9. Communication happens only through messaging apps.
10. The loan terms are unusually good for your situation.

How to check a lender or broker

1. Find the credit licence number. Licensees must give you a credit guide showing their Australian credit licence number, or an authorised representative's number and the licensee they act for.
2. Search ASIC's professional registers for the licence and check the name, address and status match.
3. Check ASIC's Moneysmart investor alert list for businesses ASIC has warned about.
4. Go direct. Type the lender's known website address yourself or call a number from its official materials, rather than using a link or number in an unsolicited message.
5. Check AFCA membership. Licensed credit providers must belong to AFCA.

Worked example: the "insurance fee" pattern (illustrative)

You apply online for a $15,000 loan after seeing a social media ad. Within an hour you receive an email saying you are approved and must pay a $450 insurance bond to "secure the funds". When you pay, a second email asks for a $900 tax clearance fee. Each payment is followed by another request, and the loan never arrives.

What would have stopped it:

• A licensed lender would not demand upfront fees by transfer before releasing funds; fees are typically shown in the contract and deducted at settlement or added to the loan.
• The lender's licence and contact details would not match ASIC's register.
• Approval before any credit check or document verification is a red flag.

If you have been scammed

Act quickly:

1. Contact your bank immediately to stop or try to recover payments and secure your accounts.
2. Report the scam to Scamwatch (run by the National Anti-Scam Centre within the ACCC) and, for cybercrime, to ReportCyber via the Australian Cyber Security Centre.
3. Protect your identity: contact IDCARE for free identity support if you shared documents.
4. Ask for a ban on your credit report with Equifax and Experian if you think someone may apply for credit in your name. During a ban period a credit reporting body generally cannot disclose your credit report without your consent.
5. Change passwords and enable two-factor authentication.
6. Report to ASIC if the business claims to be licensed or is lending without a licence.
7. Watch for recovery scams — people offering to recover your money for a fee.

If a bank or other regulated business handled your payment, you may be able to complain to it and then to AFCA. New scam prevention obligations on banks, telcos and digital platforms are being introduced under the Scams Prevention Framework; check Scamwatch and the ACCC for which rules are in force.

Protecting yourself before you apply

• Apply only through lenders you have checked.
• Never share one-time codes or online banking passwords.
• Use the personal loan checklist and keep copies of everything you send.
• Read personal loan fees so you know how legitimate fees are charged.

For complaints and reporting contacts, see complaints and free help.

Frequently asked questions

Do real lenders ever charge fees before the loan?

Legitimate lenders disclose their fees before you sign, and establishment fees are usually deducted from the loan or added to it at settlement. A demand for payment to "release" an approved loan is a classic scam pattern.

Is it safe to share my bank statements?

Lenders do need to verify your finances. Share statements or use a secure data-sharing service only with a licensed lender you have checked, and never share your online banking password or one-time codes.

Can I get my money back?

Sometimes, if you contact your bank quickly. Recovery is not guaranteed. Report the scam to Scamwatch and your bank as soon as possible.

What if a scammer took out a loan in my name?

Contact the lender and credit reporting bodies, ask for a ban period, and get help from IDCARE. You can ask for incorrect listings to be corrected; see credit scores.

Sources and where to check

• Scamwatch — report scams and current scam alerts
• ASIC — professional registers of credit licensees
• ASIC Moneysmart — investor alert list and loan scams
• Australian Cyber Security Centre — ReportCyber
• IDCARE — free identity and cyber support