findcarloans.com.auInspection sheet for a car loan

Sheet FCL · Item 04 of 06Scams

Car loan scams: the car, the lender and the name

ASIC’s scam guidance starts from the licence: its Professional Registers show whether a business holds an Australian credit licence, and Moneysmart’s investor alert list, aimed at investment offers, names businesses that may be targeting Australians without one. This page groups the official warnings that touch car finance under three things a scam can use: the business doing the lending, the car that secures the loan, and the identity of the person borrowing.

General information

General information, not legal or financial advice. Moneysmart’s advice is to act fast if a scam is suspected and to report it to Scamwatch, which the National Anti-Scam Centre runs.

Panel A: the lender that is not who it says

ASIC’s guidance on avoiding scams starts from the licence. For an offer to invest, it says to search ASIC’s Professional Registers for an Australian financial services licence or an Australian credit licence, and to check that the licence number and company details given match what the register shows. A business that lends to people for personal, domestic or household purposes needs a credit licence unless an exemption applies, and the same register lists credit licensees, so the same check works on a lender. Item 1 walks through the search.

CHECKSigns drawn from ASIC’s checks

  • A licence number or company details that do not match what ASIC’s Professional Registers show.
  • A name on Moneysmart’s investor alert list, which is aimed at investment offers and names companies, businesses and websites that may be targeting Australians without a current Australian financial services or credit licence. Moneysmart warns that a name missing from the list is not a reason to trust it.
  • Contact details that come only from the email or phone call itself. ASIC’s guidance is to find a business’s details through a search of one’s own rather than rely on those provided in the message.

ASIC adds that a business being listed on a government register does not, by itself, guarantee that the business is trustworthy.

Panel B: the car that secures the loan

With a secured car loan, Moneysmart explains, the car stands behind the loan: if repayments are not met, the lender can take the car and sell it to cover the debt. That gives a scam a way in through the car. A used car can come with someone else’s loan still attached, since the PPSR says a security interest registered against a car usually indicates money owing on it. And a car can be stolen: the PPSR warns that a car bought from a private seller and later found to be stolen may cost the buyer both the car and the money paid for it.

CHECKSigns the PPSR and Scamwatch list

  • A PPSR search showing a security interest registered against the car, which the PPSR says can put a buyer who goes ahead at risk of the car being repossessed if money is still owed on it.
  • Stolen-vehicle indicators in the search result.
  • Search details that do not match the car even though the VIN or chassis number was entered correctly, which the PPSR calls one possible indication that the number has been altered.
  • A car offered at an unbelievably low price, one of the warning signs Scamwatch lists for buying scams. It names cars among the expensive products scammers sell on online marketplaces.

Item 5 reads each PPSR result in turn.

Panel C: a loan in someone else’s name

Scamwatch defines identity theft as fraud “that involves using someone else’s personal information to steal money or gain other benefits”, and says it often begins with phishing or with information stolen in data breaches. Moneysmart says that if a credit report shows loans or debts the person knows nothing about, “it could mean someone has stolen your identity.”

CHECKSigns Moneysmart lists for identity theft

Moneysmart notes that identity theft may not be noticed straight away, and lists six signs, in this order:

  1. Bills or charges on the bank statement that look out of the ordinary.
  2. Important mail that goes missing.
  3. Mail nobody was expecting, such as a new bank card or a letter about a share transfer.
  4. Calls or texts about products or services the person does not use.
  5. Odd emails turning up in the inbox.
  6. A sudden rise in suspicious calls, texts or social media messages.

Moneysmart’s checklist includes requesting a copy of the credit report and looking for debts, loans or credit applications that are not recognised, and, where fraud is suspected, requesting a temporary ban on the credit report. Moneysmart says there is a right to a free copy of a credit report every 3 months; its credit reports page explains how.

After a scam: the steps the sources give

Moneysmart’s page on what to do if you’ve been scammed gives several lists. Two of them are set out here in full and in its order, in our own words.

Act fast after a scam: Moneysmart’s four steps

  1. If money has already gone to the scammer, do not send any more. Block every way the scammer can make contact.

  2. Report the scam to the bank or financial institution. Ask it to stop any transactions, and ask what else should be done.

  3. Warn family and friends about the scam, and watch out for follow-up scams.

  4. Report the scam to Scamwatch, to help stop it and protect others. Moneysmart says Scamwatch collates information about all scam types and passes it to other agencies, including ASIC and ReportCyber.

If a scammer has personal details: Moneysmart’s list

  1. Tell the bank, the super fund and any other financial services.

  2. Contact IDCARE. Both Scamwatch and Moneysmart point to it as the national identity and cyber support service for Australia and New Zealand, which they say helps people make a plan, for free, to limit the damage.

  3. Sign out of every account and device, and set new, stronger passwords that have not been used before. A leaked password used anywhere else needs changing there too.

  4. Watch for suspicious emails, calls, texts and social media messages. Block or ignore anyone unknown, and do not click any links.

  5. Keep a close eye on the bank account for any transactions that were not authorised.

  6. Ask for a temporary ban on the credit report, so that no loans or credit applications can be made without permission.

  7. Ask for a free copy of the credit report, and check it for debts, loans or credit applications that are not recognised.

Next item
05 · Money owing on a used car

Sources for this page