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Borrowers looking for private finance are often under time pressure, which is exactly what a scammer wants. A few checks, done before any money moves, remove nearly all the risk.
Warning signs
- Guaranteed approval. No lender can promise approval before seeing the title, a valuation and your documents.
- No interest in the security. A lender who does not care about the property is not planning to lend against it.
- An upfront fee described as insurance, a bond, tax, a release fee or legal costs. Especially one that grows each time you pay.
- Rates far below the market. Private money at bank rates does not exist.
- Pressure. An offer that expires today, or a fee that must be paid within hours.
- Free email addresses and mobile numbers only. No landline, no office, no website history.
- Payment to a personal account, overseas account or in cryptocurrency.
- Unsolicited contact, particularly through social media or messaging apps.
- Documents with errors, mismatched company names or a lender’s name that is a near copy of a well-known firm.
What a genuine process looks like
| Step | What happens | What you pay |
|---|---|---|
| Enquiry | You describe the need and the security | Nothing |
| Indicative terms | Written, conditional, with rate and fees set out | Nothing |
| Valuation | An independent valuer inspects | Valuation fee |
| Formal offer | Issued after valuation and searches | Sometimes a commitment fee |
| Documents | Prepared by the lender’s solicitor, reviewed by yours | Your own solicitor |
| Settlement | Funds released, fees deducted from the advance | Fees come out of the loan |
Checks to run
- ABN Lookup and ASIC. The company exists, is registered and the name matches the documents exactly.
- The people. Directors named on the ASIC extract match who you are dealing with.
- The solicitor. A law firm acts for the lender. Verify the firm independently through the state law society, using contact details you find yourself.
- The account. Any payment goes to a solicitor’s trust account or a company account in the lender’s exact name. Confirm account details by phone on a number you sourced independently, because email interception is common.
- Your own solicitor. Have them review everything before you sign or pay.
- ASIC’s Moneysmart site lists companies you should not deal with.
Upfront fee traps that are not quite scams
Some operators are real businesses whose model is collecting application or commitment fees on deals that were never likely to settle. Protect yourself by asking what the fee covers, when it is refundable, and how many loans the firm settled in the past year. Get the answers in writing.
If something feels wrong
Stop, and do not send more money to recover what you have paid. Call your bank. Report it. Then start again with a lender you can verify. See what is a private lender and comparing private loan offers. Lienhouse does not charge a fee to make an enquiry, and the steps are on the how it works page.
We match you with a funder and email you their introduction. Reply to it and they’ll be in touch.
Get matched with a funderFAQ
Is a valuation fee paid up front normal?
Yes. The valuer needs to be paid whether or not the loan proceeds. It should be a market fee for the property type, ideally paid to the valuation firm or a solicitor's trust account.
What is a commitment fee?
A fee some lenders charge on acceptance of a formal offer, to cover their work if the borrower walks away. It should be modest, documented, and credited at settlement.
Where do I report a scam?
Scamwatch and ASIC, and your bank immediately if money has been sent. If identity documents were provided, contact IDCARE.