Cash-strapped consumers under fraudulent fire – scammers on the rise

(09 June 2025, Johannesburg) South Africans are more digitally connected than ever, but with this convenience comes growing risk. The increase in internet usage, mobile penetration, and social media engagement has led to a surge in online fraud, with scammers exploiting every opportunity to target vulnerable consumers—especially those seeking credit.

“Increased reliance by consumers and businesses on online platforms has led to a significant rise in scams and fraudulent activity,” says Leonie van Pletzen, CEO of MicroFinance South Africa (MFSA). “Through phishing, smishing, and social media scams, victims are tricked into sharing personal details, downloading malicious software, or making payments to fraudsters.”

According to Roy Retief, Head of Operations at the South African Fraud Prevention Service, the country is mirroring international trends, with scammers constantly evolving their tactics to access consumers’ personal and financial data.

“Scammers are taking advantage of the increasingly desperate need for consumers to access cash and are highly active in impersonating online lenders,” warns van Pletzen. “They pose as registered credit providers and offer large loans with no credit checks, often targeting those who are most financially vulnerable.”

Van Pletzen gives some examples of scams that are currently circulating that consumers should be aware of. “Be careful about responding to email offers and completing an application that is then emailed back,” she explains. “Online lenders require an application to be completed on their website or app, not via email.”

“In particular, consumers should never pay any fees upfront before they receive the loan in their bank account, as this is known as an advance fee scam,” she advises. “In addition, if a consumer is sent a URL link, they should check the URL address to make sure it belongs the company they are expecting it from.”

Van Pletzen further adds that individuals should also be on the lookout for websites that offer very big loan amounts at very low interest rates, or that offer cost of credit that is not aligned with the National Credit Regulator (NCR).

With financial pressure mounting for households during the winter months, MFSA is urging consumers to be vigilant and watch out for the following red flags when applying for loans online:

🔴 Top warning signs of online lending scams

1. Upfront payment requests

· Scammers demand payment before releasing the loan (for “insurance”, “processing”, or “admin” fees).

· Legitimate lenders deduct fees from the loan amount, and never ask for upfront payment.

2. No credit checks

· Guaranteed loan approvals without reviewing your credit history or income.

· Real lenders assess affordability as required by the National Credit Act.

3. Unregistered or untraceable

· Lender is not listed with the NCR and may only communicate via WhatsApp or Facebook.

· No physical address or verifiable online presence.

4. No formal contract

· No signed loan agreement or legal documentation is provided.

· You are asked to rely on screenshots or verbal promises.

5. Pressure tactics

· Urgency messages: “Apply now—offer expires today!”

· Reputable lenders give you time to understand the terms.

6. Strange email or website

· Use of free personal email accounts (e.g., Gmail, Yahoo).

· Unprofessional websites without security certificates (no “https”).

7. ‘Too good to be true’ offers

· Very low interest rates, large sums regardless of your situation.

· Emotional language and unrealistic promises.

“Protecting and educating users of financial services are two of the most important elements of financial inclusion,” says van Pletzen. “It is critical that all South Africans—especially those with limited financial literacy—are aware of these scams and how to avoid them.”

“With the colder months posing additional financial strain on households, consumers are encouraged to stay informed, and verify lenders on the NCR website,” she concludes. “Most importantly, consumers should never pay money upfront for a loan.”

Ends

About MFSA

MicroFinance South Africa (MFSA) represents South Africa’s registered microfinance institutions, advocating for ethical lending, consumer protection, and financial inclusion. Through industry leadership, MFSA promotes responsible credit practices that empower individuals, support small businesses, and drive economic growth.

About Leonie van Pletzen 

Leonie van Pletzen is the Chief Executive Officer of MicroFinance South Africa (MFSA), a leading voice for the microfinance sector in South Africa. With nearly 15 years of experience in the industry, Leonie is recognised as a passionate advocate for ethical lending, financial inclusion, and regulatory reform. Having risen through the ranks at MFSA since 2010, she brings a wealth of expertise in industry advocacy, corporate governance, stakeholder engagement, and sustainable development.

Leonie has played a key role in shaping policy dialogue between government, regulators, and the private sector, and is an active contributor on various national committees, including the National Credit Regulator’s Credit Industry Forum and the Banking Sector Education and Training Authority. Her leadership is defined by a commitment to protecting vulnerable consumers while ensuring the long-term sustainability of responsible credit provision in South Africa. 

For further information contact:

Claire Watt | Ntokozo Kalako

The Friday Street Club

Tel: 082 490 3796 | 067 610 6879

Email: claire@thefridaystreetclub.co.za | ntokozo@thefridaystreetclub.co.za