Are Loan Finder Sites Scamming You?
Blacklisted? Desperately seeking a loan via online sourcing companies? These companies could be scamming you, and will worsen your debt.
Published: Tuesday, November 7th 2017
A couple of years ago, a company called Damal Trading (Pty) Ltd came under close scrutiny after Moneyweb published an article detailing the widespread consumer unhappiness surrounding their business.
They trade under a number of names, some of which may have flooded your email inbox in the past. These include Loan Discovery, Loan Detector, Loan Locator and Loan Tracer. Adding to these are other companies called Loan Hub, Loan Quest, Loan Spotter, Lone Zone, Loan Tracker, Loan Connector and a particular name I’ll be focusing on in this article – Loan Finder SA.
Not a very imaginative bunch, then.
We here at CompareGuru try to get all the facts on a subject before we publish anything.
In an attempt to gather these specifics, we contacted the Blackbird Holdings Group.
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Who Are These Companies And What Do They Do?
With our economy in such shambles, desperate people are making hasty and reckless financial decisions. This includes pawning your car, creating unmanageable debt and turning to loan shark companies for help.
What these companies do is appear to offer people a loan-sourcing service.
Now, here is where you need to pay special attention, because the click-happy people who have fallen for this alleged ‘trick’ number in the thousands.
They all have the word LOAN plastered all over their derivative company names, so surely one could assume that they offer loans. Right? Wrong.
These companies do not, have no intention of, and are in no position to grant this credit themselves.
The companies claim to offer you a ‘complimentary’ loan-finding service. So you sign up and provide them with your details.
You’re then under the impression that they’re going to source an online lender who would be willing to give you a loan. After all, this is what they constantly assure you of.
By signing up, you have just agreed to their Terms and Conditions – which already come ticked the moment you enter Loan Finder SA’s website.
For your convenience.
What Happens Next?
Loan Finder SA states that they ‘even serve those who may have a poor credit rating, defaults, or garnishee orders that can result from divorce, illness or death.’
How nice of them.
Except, according to many sources, the results seem to come back negative almost every single time. Even to those with an impeccable credit rating.
‘Sorry’, they say, ‘we couldn’t find you a loan.’
Now, beneath layers of obfuscation in the Terms and Conditions which came ready-ticked and which you didn’t read – because ain’t nobody got time for that – you’ve just agreed to pay this company money.
You’re already strapped for cash, and now you’ve gone and agreed for them to debit a once-off initiation fee of up to R400 and a monthly fee of up to R100.
What you’re paying for, under various terms or guises (depending on the company) is a ‘Financial Counselling Programme’ – and that’s not what you came here for, is it? If that’s what you needed, you’d go to your bank.
In the case of Damal Trading, their lawyer Schalk Pretorius of Pretorius & Stander Attorneys told Moneyweb that the company provides telephonic legal assistance as their primary service. The loan-finding service is a ‘convenient value added benefit’.
So in effect, these companies are offering paralegal services and are allegedly masquerading as loan locators.
Most of the people who are actively looking for loans and who are willing to try their luck on these companies don’t have money to throw around. When the first payment doesn’t clear, or if the client reverses it, these companies are quick to demand payment and threaten legal action against you.
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The People And Their Views
A quick glance at Loan Finder SA’s Facebook page or Hello Peter profile will give you a good idea of the public’s opinion. The rating system lists them well beneath 2 upon a scale of 5 stars. Consumers who feel they have been misled, wronged or tricked have been calling Loan Finder SA outright thieves, crooks, fraudsters and the biggest scam in South Africa.
The majority of these consumers state that the company has misled them through unethical marketing strategies and confusing Terms and Conditions. A large percentage of these are complaints about unauthorised debit orders going off from their bank accounts.
Further complaints issued include those pertaining to a cancellation fee debited upon a client cancelling their contract. The company offers a five-day cooling-off period after the services have become active, in which customers may cancel their contract. The cancellation fee then comes into effect after these five days have passed. Clients have stated that they have tried to have their contracts cancelled without success for long periods of time, or that nobody returns their calls or emails. As it is with the actual activation of these services, clients claim to be unaware of the cooling-off period.
Further claims include confusing reference numbers upon bank statements and debits going off despite rejection of the Terms and Conditions or full completion of the application form. Numerous consumers have issued threats of legal action against the company.
As in the case of the aforementioned Damal Trading, their attorney Pretorius stated: “We note the consumer complaints. One should however take into account that only a fraction of our clients’ clients are disgruntled, and most of these consumers’ frustrations can be attributed to their own ignorance.”
In other words – you didn’t read the T’s & C’s.
Consumer Protection Act
As in the case of Damal Trading operating under a variety of names, Pretorius told Moneyweb that their client’s decision to trade under various names is a lawful business decision which generates, inter alia, healthy competition, a wider span of advertising and accordingly creates the possibility of attracting more sucke--CLIENTS! Sorry, he said clients.
All of these companies trade under names related to loans. Nothing about them indicates that they’re, foremost, a company offering financial advice or assistance. Discovery, Detector, Locator, Tracer, Spotter, Tracker, Finder, etc – prospective clients are immediately under the impression that these companies focus primarily on loan sourcing.
This could be construed as an attempt to mislead consumers, which is prohibited under sections 29 and 41 of the CPA.
As in the case of bundling services, such as Loan Finder SA’s 4-in-1 plan, this may be a huge contributing factor to the confusion of clients. This plan is what you’re signing up for, wittingly or no.
The majority of these unhappy clients are inadvertently signing up for a service they didn’t want. None of these services are available separately, or at their own separate costs. This, too, is prohibited in the CPA under section 13 (C).
It could, however, be argued that the loan finding service is complimentary, and therefore ‘results in economic benefit for consumers.’ Whether or not these companies are entirely compliant with the Consumer Protection Act is up for debate.
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Contact With Loan Finder SA
Any effort to contact Loan Finder SA directly was unsuccessful. We phoned the number on their website which led to customer care. Customer care insisted that they do not have any management or supervisor available for us to speak to.
That must be nice.
They gave us a number to contact the Marketing department, which led to a dead line. We spoke to three different representatives in customer care and all of them responded in the same way.
Our emails to firstname.lastname@example.org remain unanswered.
We emailed both Credit Gain Services and Blackbird Holdings with a request for an interview with the relevant person(s). We marked the emails for the attention of the Director, who seems to be the Director of both Credit Gain and Blackbird. This is despite insistence that they have no affiliation.
These emails remain unanswered.
This led us to approaching them face to face. We headed out to the address given online, which turned out to be a building shared by Credit Gain and Blackbird. There, we were told that the Director had already left. Only one employee of the company has been willing to liaise with us.
Instead of a face-to-face meeting, it was arranged for us to submit a questionnaire, for the relevant person(s) to go through. Following friendly email correspondence, the questionnaire was submitted. A week passed, and upon inquiry we received a response saying;
Thanks again for the interest shown in our products and services.
I’ve passed the interview sheet onto Senior Management and unfortunately, we are unable to assist you at this stage. If any of your clients would like information on the company and the products and services, they are more than welcome to contact any of our contracted affiliates (and comparison sites), visit our website or call into our contact center.
Furthermore, a large portion of your queries relates to Damal Trading and Lifestyle Legal et al. We have no relationship with these organisations and it would be more appropriate for you to contact them directly to find out about their services and business practices.
Best of luck with the article.
Interestingly, the company was not able to answer basic questions about their operations, processes, complaints handling and review processes. They were also not able to answer questions about their actual success rate of approved customers.
We're as confused as you are...
Now, this article is by no means intended to shape the opinion of the customer or their perception of any company. The questions we asked are pretty straightforward and we imagine any company with nothing to hide would have been happy to answer them. Loan Finder SA would not answer any, except to distance themselves from Damal Trading and Lifestyle Legal.
Therefore, there is no evidence linking them (or any of the other mentioned companies) to illegal or unethical business practice.
The onus is on you, the consumer, to do thorough research into any company you deal with. The onus is on you to read the Terms and Conditions. Some companies get away with murder, and we allow this to happen.
*Note - In researching Loan Finder SA, the author of this article did not volunteer any personal information in any capacity. He did not complete any online forms or applications. In two days, he has received five phone calls and six emails to his personal email account from different companies offering him a loan. These companies include Loan Max and Capital Financial Management. How did they obtain his personal contact details?*