What are the warning signs of a loan / advance-fee scam?

Watch for: Guaranteed approval regardless of credit; Any fee charged before the loan is paid out; Lender not on the ASIC credit licence register; Contact only via WhatsApp / Telegram.

How can I tell if this is a scam?

Stop and verify independently. Contact the organisation using details you look up yourself, never the ones in the message, and don't act on urgency. You can also paste the message into the ScamShield AI scam checker for a risk assessment — it gives guidance, not a guarantee.

What should I do if I clicked the link or replied?

Stop all contact, change the password on any account you logged into and turn on two-factor authentication, and watch your accounts for changes you didn't make. Legit lenders never charge before paying out a loan. Check the lender's credit licence on the ASIC register. Talk to a free financial counsellor on 1800 007 007.

What should I do if I already sent money?

Contact your bank immediately and ask about stopping or recalling the payment, keep all evidence, then report the scam. Be wary of anyone who later offers to recover your money for a fee.

Where should Australians report this scam?

Report scams to Scamwatch (National Anti-Scam Centre), report cybercrime to ReportCyber, forward scam texts to 7726, and contact IDCARE if identity details were exposed. Contact your bank first if money is involved.

All scams

💳

Loan / advance-fee scam

Guaranteed loans that need an upfront 'insurance' or 'processing' fee.

MigrantStudent

How it works

You're approved for a personal loan with no credit check — but first you need to pay a small insurance or first-month fee. After paying, the loan never arrives and the 'lender' disappears.

Common scenarios to watch for

This scam shows up in several different shapes. Recognise the pattern, not just one message.

Reporting locationHotlines on the printed checklist will match this location.

'Guaranteed approval' personal loan

Approved instantly, no credit check — but you must pay an 'insurance' fee via PayID before funds release.

"Approved! $15,000 ready. Pay $390 lender insurance to finalise, funds in 1 hour."

Red flags to spot

Is the loan approved instantly with no credit check?
Are you being asked to pay an upfront fee before receiving funds?
Is the fee described as 'insurance', 'processing', or 'verification'?
Does the lender have no verifiable ABN or physical address?

Buy-now-pay-later impersonation

Texts pretending to be Afterpay or Zip ask for verification of bank details to 'increase your limit'.

"Afterpay: your limit increased to $5,000. Verify bank within 24h to activate: afterpay-verify.co"

Red flags to spot

Does the URL not match afterpay.com, zip.co, or the real app domain?
Are you being asked to verify bank details through a link in an SMS?
Did you request a limit increase, or did it arrive unprompted?
Are you being threatened with account suspension if you don't act?

Debt-consolidation 'release fee'

Claims to consolidate all your debts into one cheap loan, but needs a $500 admin fee first. After paying, contact dies.

"Wipe all your debts into one $200/mo payment — admin fee $500 via PayID, fully refundable."

Red flags to spot

Are you being asked to pay an admin fee before any debt consolidation happens?
Is the promised monthly payment unrealistically low?
Do they claim the fee is 'fully refundable' but offer no written guarantee?
Can you verify the company is licensed with ASIC?

Red flags

🚩Guaranteed approval regardless of credit
🚩Any fee charged before the loan is paid out
🚩Lender not on the ASIC credit licence register
🚩Contact only via WhatsApp / Telegram

What to do

1Legit lenders never charge before paying out a loan.
2Check the lender's credit licence on the ASIC register.
3Talk to a free financial counsellor on 1800 007 007.

Who's targeted

People with poor credit or no credit history.
Students, migrants and gig workers needing cash fast.

Why it works

Guaranteed approval bypasses the rejection they've had elsewhere.
The fee is small compared to the promised loan.

Common variations

Different shapes of the same scam — recognise the pattern.

1'Lender insurance' PayID payment before release.
2'First month repayment' demanded upfront.
3Crypto deposit to 'unlock' the loan.

If you've already been scammed

1Stop further payments — each fee triggers another.
2Dispute with your bank and call IDCARE if you shared ID.
3Speak to a free financial counsellor on 1800 007 007.

Frequently asked

Is any upfront fee legitimate?▾

No. Legal lenders deduct fees from the loan amount, never upfront.

How do I check a lender?▾

Search ASIC's credit licence register (ACL number) at asic.gov.au.

Where can I get a real small loan?▾

Try a No Interest Loan (NILS) at goodshep.org.au or your credit union.

Questions people ask about this scam

How does the loan / advance-fee scam work?: You're approved for a personal loan with no credit check — but first you need to pay a small insurance or first-month fee. After paying, the loan never arrives and the 'lender' disappears.
What are the warning signs of a loan / advance-fee scam?: Watch for: Guaranteed approval regardless of credit; Any fee charged before the loan is paid out; Lender not on the ASIC credit licence register; Contact only via WhatsApp / Telegram.
How can I tell if this is a scam?: Stop and verify independently. Contact the organisation using details you look up yourself, never the ones in the message, and don't act on urgency. You can also paste the message into the ScamShield AI scam checker for a risk assessment — it gives guidance, not a guarantee.
What should I do if I clicked the link or replied?: Stop all contact, change the password on any account you logged into and turn on two-factor authentication, and watch your accounts for changes you didn't make. Legit lenders never charge before paying out a loan. Check the lender's credit licence on the ASIC register. Talk to a free financial counsellor on 1800 007 007.
What should I do if I already sent money?: Contact your bank immediately and ask about stopping or recalling the payment, keep all evidence, then report the scam. Be wary of anyone who later offers to recover your money for a fee.
Where should Australians report this scam?: Report scams to Scamwatch (National Anti-Scam Centre), report cybercrime to ReportCyber, forward scam texts to 7726, and contact IDCARE if identity details were exposed. Contact your bank first if money is involved.

General scam awareness information. ScamShield AI cannot guarantee that every scam will be detected or that a message is legitimate.

Check a message like this Report & next steps