Con artists target Provincial car-loan borrowers

Opportunistic con artists are targeting borrowers who owe money to stricken Provincial Finance, attempting to trick them into diverting vehicle loan repayments into a bogus bank account, the company's receiver says.

Provincial was forced into receivership last month owing 14,000 debenture stock investors nearly $324 million after the level of bad debts on its $323 million loan book ballooned out of control.

Yesterday, receiver John Waller of PricewaterhouseCoopers, who is still trying to get the company back in business, said fraudsters were seeking to grab money from Auckland car owners with loans from Provincial.

"Somebody has been ringing up people saying the receiver has changed the bank account you pay your money into. That is not the case at all. We will not change the bank account."

Waller said the incidents over the past week or so were "isolated" and he was not aware so far of any borrowers falling for the scam.

"We're just keeping a close eye on this, we just want to nip it in the bud."

Waller did not know how the crooks were obtaining contact details for Provincial's borrowers. Unsuccessful attempts had been made to trace the calls and the police were now investigating.

"The message is just keep paying to the Provincial bank account, don't change unless you get something in writing from us."

Provincial has 28,000 loans on vehicles with an average value of $9000 each. The South Island-based company ran into trouble by making risky loans on used vehicles mainly in the Auckland market, prompting speculation the company had been systematically targeted by gangs of fraudsters who took advantage of lax lending criteria.

Mr Waller has said Provincial's investors should get most if not all of their principal back. However, returns to investors and prospects of the company being put back on its feet were still largely dependent on the level of recoveries from its loan book.