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Note: Abuse of bank names and advance payments to illegal providers of credit!

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The Netherlands Authority for the Financial Markets (AFM) warns that consumers have to stay alert concerning illegal providers of credit on the Internet. In the past year, the AFM has implemented various measures and regularly issued warnings against illegal credit providers. In 2011, the AFM will again take action against illegal providers, but consumers should also be alert and carefully examine the provider when they consider a loan via the Internet.

Each week the AFM receives reports from consumers concerning illegal providers. The AFM has concluded that many of these providers apply the same modus operandi; the provider places advertisements on the Internet carrying titles such as: 'Loans with BKR' or 'Need money quickly'. They often indicate that a registration with the Credit Registration Office (BKR) in Tiel is not a problem. These providers often make use of free email addresses. The provider sends information, such as a brochure or an agreement, to the consumer via this email address. The brochure and the agreement often state (a corruption of) the name and logo of a (foreign) bank. This would make it seem as if it concerns a legitimate provider of credit, while this is not the case.

The provider then asks the consumer to pay money in advance for the loan, citing administrative charges or insurance costs. After having paid, the consumer usually never hears again from the provider. Sometimes the provider uses some excuse to let the consumer pay even more money. The loan is never actually provided.

Advice to consumers
The AFM advises consumers, who consider applying for a loan via advertisements on the Internet, to carefully examine the provider in advance. Search engines on the Internet often provide information on the provider. In this connection, the following can at least be taken into account: 

  • It is not usual to money for a loan in advance. 
  • Be alert to the use of free email addresses, such as hotmail.com, gmail.com, lavabit.com or aol.com. These are not common email addresses for companies. 
  • Pay attention where it concerns offers from (foreign) banks whereby the 'bank' makes use of free email addresses and demands payment in advance for the loan.
  • Check whether the provider holds a licence. You can check on the AFM website whether the provider has a licence. Providers without a licence are not allowed to give you a loan.

Where possible, the AFM imposes formal measures on illegal providers such as placing them on a public warning list and imposing orders for incremental penalty payments or fines. In addition, the AFM also takes action against these activities in a different manner by cooperating with fellow supervisors and investigative agencies. Providers also remove offers from the Internet at the request of the AFM.

The AFM promotes fairness and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands.

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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