Borrower beware: Dh1m loan @2% interest, 6-month EMI holiday

International fraudsters are misusing online marketing tools to trap people to extract money by promising huge amounts of long-term finance for companies and individuals in need for cash.

Here’s an example of why, if it appears to be too good to be true, it is…

An investigation by Emirates 24|7 into what seemed like a ‘decoy’ ad reveals an international gang of fraudsters trying to cheat individuals and corporations into believing that they have huge amount of cash ready to lending at favourable terms and conditions for a long term, up to 25 years.

However, they insist on ‘token’ money upfront and in order to insure the fund transfer to the borrower’s bank accounts.

The ad, which appeared on some classifieds websites in the UAE and Qatar, promised to offer “any amount” of loans at favourable terms and conditions.

We replied to the email address published in the ad and applied for a Dh1 million loan, and got an immediate reply from M. Hary, who claimed to be a loan officer with the company. He e-mailed details of the loan sanctioning procedures, including signed documents on the company’s letterhead. The same ad by Legacy Law Firm is posted on several classifieds sites, including Russian, Albanian, Finnish, Spanish, sites. The company is offering various rates of interests, starting from just 2 per cent and a long repayment period of 25 years.

A random search of the details advertised by the said company results in several hundred pages where the company’s ad appears on different language websites in different countries, thus indicating the extent of the fraud.

“We are sincere Government well registered and certified private money lender permitted to render financial assistant to individual and cooperate bodies, ranging from the Amount of $5,000 to $500,000,000 Million Dollars ,Euro and Pounds with long loan repayment period of 1 year to 25 years [sic],” reads one such ad. A casual reading of the advertisement is enough to raise doubt about the credibility of the advertiser, but there remains the possibility of the really gullible to fall prey to such offers.

“Loan Available now are Business, Personal, House, Travel and Student Loans. Apply for a loan today. It’s Easy and fast to get at 3% interest rates and monthly installment payments. Check-out this great offer. For more information,” says the advertisement, which gives out just an email to contact. “This is an opportunity for serious and interested persons to apply for loan today and expend your business and we give a grace period of 6 months to our customer before they start making the monthly repayment. Thanks for taking your time to view our advert.”

Within a day of sending the loan request, we received an approval along with detailed terms and conditions. An amount of Dh1 million was sanctioned in no time. The official, who introduced himself as Harry Marshall, the loan Department Director for Legacy Loan and Services Pty Ltd (L.L.F.S), offered Dh1 million at a 3 per cent rate of interest for a tenure of 10 years, repayable in 120 installments. The loan was offered to an Emirates 24|7 journalist.

Once the client accepts the conditions, a loan agreement form is forwarded immediately, followed by a number of mobile phone calls from a number in South Africa. The emailed letter also carried another official’s name, viz, Mrs Susane McAnany. The letter explains that the total amount to be repaid is Dh 1,158,729.03 which includes an interest payment of Dh158,729.03.

The loan company will then asked for details of the bank account of the applicant, including the Swift code to enable the effective transfer of loan funds.

The detailed loan agreement, however, contains clause to “insure the loan” before moving big amounts outside South Africa. “We are going to insure the loan here in Johannesburg with Mutual Insurance plc. You are advised to send the insurance fees though Western Union Money Transfer to one Naazlee Ismail in Johannesburg, South Africa. Upon making the payment, you are to email us the MTCN Number, sender’s names and full address, and a text question and answer, to enable us to receive the fees here. Once payment is confirmed and the loan duly insured, my bank will contact you immediately and have your loan fund transfer to within 24 hours,” said a supposed bank representative in emails and telephone conversations to the Emirates 24|7 journalist.

A loan agreement letter running into several pages promises the borrower that the loan amount can be withdrawn within three business days. The provisions for securing Dh 1 million loan reads as follows: “The loan shall be secured by the borrower by the following persons: (Drikus Theo Joubert) In light of the above acknowledgment, it should be clearly noted that according to the sub-section code 184.07 of the South Africa constitution, says that any Loan amount of money been transferred within and outside the Country must be Insured/Registered against anti-terrorism and unforeseen Problems.” Due to this reason, it is explained by an mail, we are required to insure the loan.

“It will cost you Dh5,346 (Five Thousand Three Hundred and Forty Six AED only) to insure the loan. After the 5,346-AED has been paid, then your loan funds the sum of AED-1,000,000.00 (One Million  AED only) will be transferred into your Bank account by our transferring bank,” we were told via an email.

The lender specifies that the insurance fees and organisation fees cannot be deducted from the loan amount for security reasons. “These are the rules and regulations governed the Loan Company’s in the South Africa (S.A).Foreign Remittance Fund Transfer,” the loan agreement form says. After receiving the loan agreement form and subsequent emails urging the borrower to remit the insurance money through Western Union, the loan company representatives keep pestering the borrower with international phone calls, reminding him or her to remit the money.

“We don’t have any office in Dubai, but we have our office in Qatar,” the caller would say, in an obvious bid to avoid a personal meeting. Classifieds websites on which such ads show up warn customers against remitting money, and money transfer companies also warn customers about such frauds.

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