THE Securities and Exchange Commission (SEC) warned the public on individuals pretending to be registered lending or financing companies who are pretending to offer loans but are asking for an "advance fee" from the borrower.

These lending companies would advertise themselves on social media to attract prospects. Those who are interested would chat with an agent who would then ask for the requirements such as ID, bank account/e-wallet, etc.

The scammers would then direct the client to use the chatting application Telegram or other similar platforms where another so-called agent would process their application.

According to the SEC, the victim would be lured into a group chat with other individuals who are also applying for a loan but are part of the scam. It is at this point they would be told of the advance fee or payment.

The scammers would claim that this advance fee is proof that the prospective borrower has the capacity to repay the loan. In some cases, they would show proof they are recognized by the SEC to gain the trust of the borrowers and eliminate any suspicion.

The client's other companions in the chat would appear to comply with the requirement and after making the deposit, their loans would immediately be granted to further encourage the client to do the same.

"After getting the 'advance fee' from the borrower, the individual who pretends to be a lending or financing company would block and run from them," the SEC advised in Filipino.

In addition, the agency said those talking in the group chat said the conversations sound as if they are talking to foreigners.

"We would like to remind the public that legitimate lending or financing companies do not ask for deposit, processing or advance fees from borrowers before lending," it said.

"We call on the public to be vigilant and to avoid this kind of modus operandi," it added.

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