I Regret Lending Money to Friend - Please Help

I'm looking for advice on how to recoup funds I lent to a friend.

My friend asked to borrow $10k to pay legal fees related to the settlement of an investment scheme. I regret lending him money because my gut tells me that I won't get my money back. I trusted my friend and didn't do my due diligence - this is was my mistake. He said he'd return my money within 1 week and it's now going on 4 weeks.

1st red flag - after sending him the funds (Saturday), he asked me for another $7k the very next day!! (Sunday). He said that he sent the $10k to his friend (who I don't know), whom is also in this investment scheme to pay for the legal fees. However, his friend's doctor/hospital took $7k out for "cancer treatment". WTF?! Doctor's just don't direct debit $7k on a Sunday, they'll usually call and ask for your card details. Even so, who doesn't have the money ready for their life-saving treatment?! I said no and he had the nerve to ask me to ask my parents…

2nd red flag - he says things like "Don't lose sleep, I'll take you to Nobu and on a shopping spree once the money settles" and "just a few more days, trust the process" This comes off very charlatan-like and rather evasive, not very assuring at all. I get the feeling he is only saying this to keep me calm.

I'd appreciate any advice on how to best approach the situation. I want my $10k back and I don't care if the friendship is over. I am stressed out and it's affecting my job/work and personal relationships.

TLDR: Lent friend $10k for "legal case". Gut tells me that he is a degenerate gambler. How to get money back.

Edit 1: I already feel shit as it is. If you don't have anything constructive to say, please gtfo.


  • +53

    Did you happen to meet this "friend" online?

    • +4

      And was this a simple loan or was a "return" offered?

      • +8

        Sounds like the return was a shopping spree at Nobu

    • +9

      OP serious question and more of a study I am doing, whats the nationality of the offender and yourself?

      I've noticed migrant groups love to take advantage of their own kind.

      E.g. my partner and her family are Chinese. There's so many fellow Chinese-australians that have tried to scam them, some being successful, that it isn't funny.

      I've actually seen text messages calling them out saying is it a scam? And they'll reply back with 'no, no, we're both Chinese and in this together, we have to look after together.' It baffles me how playing this card has been successful but I can kinda see the emotional appeal.

      You don't realise how rampant it is until you're linked to the community.

      Hope you get your money back from your friend.

      • +2

        Yea curious to know too, especially when compared to the volume of caucasian con-artists who scam other caucasians and how rampant that is in the "mainstream" community.

        • +3

          Hell lets go further and say Gold Coast is OZ scam central .

        • +4

          Yes those caucasian irish roofer scammers do target older caucasians .

      • +2

        Really depends on their culture.
        Some of more traditional people from different cultures are really connected to each other and if they scam one another they will be kicked out of the family.
        Being kicked out of the family, is a huge deal.
        Nobody would come to your house or funeral or even wedding. It's the case with many different cultures.
        Those doing this kinda stuff are the less traditional ones, because they either don't care or don't realise the importance.

    • +2

      Classic scam I'm afraid

      With so many easy ways for people to borrow money from banks these days including using credit cards……
      You have to question why the banks wouldn't give this person this small amount of money…RED FLAG!

      No help will get you out of this one short of making a serious and highly damaging threat to the person

  • +131

    This person is not your friend anymore

    • +17

      Yeah, and sorry OP went through this. It is really not nice experience

    • +19

      Given OP came to us, we are the real friends. :)

      • +15

        I'll be OP's friend for $9000, even less for cash.

        • +7

          Don't forget cashback!

    • +21

      This person is not your friend anymore

      Possibly never was…

    • +17

      Think it should be OzBargain Rule 1: Never lend money to friends.

      • +8

        The tried-and-true advice is: only lend money to friends if you can afford to lose both.

        The sad truth is, unless you've got some kind of agreement between the two of you written down, then you've got zero chance of getting it back if your ex-friend doesn't want to comply. Verbal agreements are worth the paper they're written on, as they say. "But I can show the bank statement with the transfer", you say. He'll say "it was a gift", and nobody can prove otherwise. Unless you've got some solid evidence of an agreement between the two of you that you would lend and he would pay back, it'll come down to he-says-you-says in any legal proceedings.

        You're in a lose-lose situation sadly. Even if you decided "at least I'll bag him out on social media so everyone can see who he really is" then he can just deny and say you're out to badmouth him. And, if you push him you don't want to start having rocks through your window.

      • +2

        OzBargain Rule 2: Always get Insurance on your car. At least 3rd party property.

        • +2

          OzBargain Rule 3: Invest in High Yield Luxury Cars for maximum proffit

    • -1

      Yeah agreed, should have just put the $10k in crypto.

  • +75

    This is why, you shouldn’t have financial dealings with friends or family.

    didn't do my due diligence

    Oh man, this slipped under your (Risk Analyst) radar… friends and family gains access to backdoors of the “system”.

    • +18

      Lesson learnt.

      • Expensive lesson

      • +8

        Definitely no consolidation but as a well experienced Risk Manager in Finance - I had the exact same thing happen to me (Family rather than friend).
        Did the superficial fraud test, supposed 1 week short term loan turned into 4+ years and now well written off. Had no idea they were a degenerate gambler until like a year later. They definitely slip under your radar — but a lesson well learnt.

      • +10

        You should always have an agreement drawn up by a lawyer (charged to the friend) stating terns and conditions and penalties. Having said that, never loan that much money to a friend. My stubborn sister (who said her friend would never let her down so I could shut up) went guarantor for a friend. Friend didn’t pay the money back and said her now exhusband could so it had nothing to do with her (the friend) anymore. After a few years of the exhusband of friend inconsistently paying loan back, and my sister getting threatening letters from credit union that they were coming for her next, I had to step in and threaten credit union back until they agreed to delete her as a guarantor. Ask yourself why would a friend ask you for money and not family? It’s usually because they’ve already ripped their family off and family won’t lend to them anymore.

        • +2

          can i ask why they would delete her as a guarantor if she signed the paper ?

          • +2

            @juki: perhaps she didn't obtain legal advice?

            Or some banks changed policy not to allow guarantees from friends…

            Interesting question how she got out of it.

          • +4

            @juki: It’s a long story but the CU was accepting the exhusband making insanely low repayments of about $20 a month which would have meant he took decades to pay off the loan. I’m a paralegal and I wrote a letter for her to send from herself saying they had a duty of care to ensure she wasn’t saddled with this debt for decades, which she had to declare as a potential debt of hers every time she went for a loan. I used legal speak so they would know she got legal advice. They wrote back to her reiterating the terms of the guarantee she had signed and generally having a whinge but then released her from the guarantee.

            • +3

              @iCandy: " they had a duty of care to ensure she wasn’t saddled with this debt for decades"
              wow, another reason to be grateful about being in australia, in other parts of the world, they'd be taking her furniture out the front door with no remorse.
              Thanks for replying i didnt know duty of care extended all the way to this (we are responsible adults who should be more careful of what you sign)

    • +46

      financial dealings with friends or family.

      That's total crap. A lot of businesses in Sydney were created from family members coming together or friends starting a business. Don't have financial dealings with idiots, liars and gamblers is what you should have said.

      • +4

        Totally agree and its not too hard to sniff out the crappy / shifty deals out for most people as well .

      • +11

        It's a common saying. You are bringing money issues into your close relations.

      • Actually most rich families have this occurring, with families working together.

        Were families say no, you often see in the past history -

        Grandfather+brother (or uncle) = business with excess cashflow (using funds to buy PPOR, Commercial premises, etc)
        Father = accumulate assets (for example takes over the company store which is on real estate worth $Xmillion)

    • +2

      I disagree with this. I've lent money to people that I've known for a year or so in the sums up to $5,000. Well these are people from work.

      After that he returned the $5k he asked me for another $3k this time took up to 3 months to return it.

      I've also lent my dad $60,000 before. (Not gonna disclose reasons) Got the money back after 6 months.

      Granted though I don't have many friends and out of my high school friends I'm only in touch with about 2 out of a group of 12 not because of any sort of falling out rather too busy at work.

      Lending money to a complete random stranger is a no no. But you need to know how to judge a character. I believe I'm a pretty good judge of most people.

      Bad people usually stay away for some reason. Also I had this guy asking me for money recently but ironically I just happened to have a mortgage and I couldn't help even if I wanted to LOL.

      • +3

        I've also lent my dad $60,000 before.

        Depends on each family but I wouldn't call it even lending. It's more of 'helping' - parents who raised you or siblings you grew up with are far less likely to cheat you. If they still cannot return your money, then you know they are not able to and not that they don't intend to. That's a small risk you take but afterall it's your family so you know the situation pretty well and you don't regret as much.

  • +33

    Best way to lose friends involves lending money..

    If he is a gambler, you wont ever see a cent.

    • +15

      And don't think gambling is only at the casinos. He may have gambled it at some stock or crypto he was led to believe would explode within a week and lost it all.

      • +5

        Username checks out 🤔.

        • +2

          That’s how OP saved up $10,000. That’s a helluva lot of high anxiety bus, tram and train rides - now all for nothing. No wonder OP is p*ssed off.

      • -9

        if it was crypto he would have made money

        • +2

          Only if he knew what he was doing

          • +1

            @buckster: Tbh markets in a bull run rn, any popular crypto would’ve made big gains. Likely OP would’ve doubled their investment if they invested 4 weeks ago. Obviously not financial advice or condoning it, just a fact for this time period.

            • @Castcore: not if they were playing with leverage and futures and being pretty bad at it and whoosh they got liquidated…
              thats why its better to do spot trade sometimes

    • +1

      He just needs to win a quaddie

  • +7

    I’ll do you a good deal on some magic beans

  • +50

    Sorry for your loss man. You're not getting that back.

    • +5


      • +18

        You will get over it sooner or later and move on, perhaps chalk it up to a hard lesson learnt and move on sooner.

        You know the Serenity prayer:

        "God, grant me the serenity to accept the things I cannot change,
        courage to change the things I can,
        and wisdom to know the difference."

        You mentioned you have a job, family and I assume you have reasonable health, all is not lost. Many have lost far more and life goes on.

        Speak to someone you trust, sleep on it before making major decisions. Even posting on Ozbargain, BEFORE, rather than after….

  • +41

    All your savings over the years, from fare evading, gone… :(


    • +3


      • +2

        No pain no gain.

        This maybe a (less expensive) lesson, if it could save you from a larger lost in the future.

    • +1

      I just want to say that, you definitely read my mind.

  • +58

    If you ever lend to friends or family you are best assuming that it is not a loan at all and that you are making a donation to them.

    • +7

      +1 to this. Out of the goodness of your heart, either give it to them, or not at all. There is no lending unless you want to draw up a legal contract.

      • +2

        Even when you finally decide to "give" it to them - Still call it a loan, if that's what you'd like it to be.

        That way you'll also know which are TRUE friends and family (will understand and indeed pay back and be in touch).

    • +1

      Well said mate. If it gets paid back, it's a bonus.

    • Not all friends or all siblings are the same - your statement is a bit exaggerating. In many families, siblings help each other all the time and trust levels aren't that bad.

  • +9

    My friend asked to borrow $10k to pay legal fees related to the settlement of an investment scheme. I regret lending him money because my gut tells me that I won't get my money back. I trusted my friend and didn't do my due diligence - this is was my mistake. He said he'd return my money within 1 week and it's now going on 4 weeks.

    You're not going to get your money back.

    Apart from sending in the bikies, don't think you have much choice.

    You could probably get on A Current Affair, tell your sob story and put his name and picture up in public.

  • +4

    Cash only for gumtree transactions.. oh..

  • +6

    I feel bad for you,
    This probably happens more common than people think.

    Keep harassing for the money back, maybe call the police or call for free legal counsel.

    • +12

      Don't waste time calling police. It's a civil matter.

      A lawyer isn't much use either. No contract means it will be a crapfest and the legal costs will make it uneconomical to pursue.

      OP should write off their loss, ex-communicate their "friend" and move on. Money is gone.

      • +5

        A contract doesn't have to be written or signed.

        Legal Aid won't care they are too busy.
        Police, no it's a civil matter.

        • maybe texts could be proof, if any

        • +1

          That frustrates me so much, how is fraud a civil matter?

          • @dinna89: I'm not sure not repaying a loan is considered fraud.

            • +4

              @gimme: It is if the money is obtained through deception

          • @dinna89: Fraud is a criminal offence.

            This is a contract dispute.

            • +1


              Fraud is a criminal offence

              Yes. That's what I'm saying

          • +1

            @dinna89: Yep it's disgusting.

          • @dinna89: Its a civil matter.

            Fraud you have to prove a certain intention, which is almost impossible in cases like this.

            So Fraud scenario - You lend money via loan agreement to a business (identified by its ABN) with the funds which only (written) purpose is to buy, certain named and described, equipment (which you were going to take security over for the loan). The owner of the business then takes the funds and buys a house for himself. You find out this was his intention all along because he had delayed settlement and needed your funds. You get the emails where he discusses with the RE agent about getting your money to pay for the house, and then go down to the local cop shop.

            Non Fraud scenario - a friend gets a personal loan off you.There is a vague promises of what he will use the funds for, but nothing that substantial, there is no loan application (where he would usually detail what he would be using the funds for), and so it probably won't hold up in court (as personal loans on the whole can be used for any purpose).
            Technically he has defaulted on personal loan agreement via a change in use of funds - usually the remedy is to call back the loan (demand repayment).
            If you didn't, the borrower could argue you accepted the change of purpose.

            • +1

              @IHatePeople: I get this, but someone here is definitely perpetrating a fraud/scam, as the money being lent is not intended for the stated purpose

              It would be different if the friend (or ultimate scammer) used the money as stated and then didn't repay, as at least the initial borrowing was in good faith.

              • @dinna89: Still a civil case unfortunately.

                • +1

                  @lookingforTV: Yes, and I ask again, how is fraud a civil matter

                  • +4

                    @dinna89: First off Lending money is a contractual matter, hence the court's predisposition is that it should be handled via civil means.

                    Secondly you have to prove a criminal charge beyond a reasonable doubt.
                    As there is no written agreement how do you do that? The friend could just say I didn't tell him what I was going to use it for, or I said the word maybe - "maybe I was going to use for X purpose" or the borrower could just say "I thought I could change my mind".
                    Does the loan agreement specifically stop the person from changing their mind? (this is done by requiring the money to be used only for a specific purpose that is described in the loan contract - hence why mortgages require the address of the property to be bought or car loans require the VIN).
                    The police are not going to charge based on 'he said / she said' scenario, because that does not fulfil 'beyond a reasonable doubt' criteria.

                    Thirdly as mentioned before - there is a remedy: Demand repayment of the loan.
                    That is the remedy. If you didn't pull the loan (but happy to accept interest) then you have agreed to a change of purpose (delay basically means acceptance).

                    Also you lent money via a -> Personal loan <- (Not car loan, Not mortgage, etc), which means its based only on your capacity to pay - not what you are going to do with the money. Courts have typically been quite lenient when it come to change of purpose (as personal loans can be used for any purpose).
                    Rather the Court may ask the lender - If you only want to lend for a specific purpose,why didn't you pay the 3rd party directly?
                    As a lender you are meant to protect yourself (hence why banks don't deposit funds into your account when buying a home).

                    If your still not happy with what is suggested, perhaps you should look up the Court cases which will help you work out the exact nuance of when a loan changes from a civil matter, to a criminal matter. No one will do that research for you unless you pay them.

                    • +2

                      @IHatePeople: Another scenario could be helpful:

                      You borrow $30k money to upgrade your kitchen. The contract says "funds to only be spent on Kitchen renovation".
                      It only costs $22K
                      You spend the other $8k on a bathroom reno.
                      (you were always going to spend some money on the bathroom reno)

                      Although technically you have commited fraud, has the dominant purpose changed? No - you are upgrading your house.

                      Would a court think a criminal charge, which could involve substantial jail time, as the remedy?
                      No, they would say to the lender - "if you didn't like the fact the funds were not spent as described - why didn't you just pull the loan?"

                      • @IHatePeople: Whether it's legally enforceable as a fraud or not, it is a fraud by the common definition (obtain advantage by deception)

                        I would like to live in a society where the police and legal system take on these frauds rather than allowing them to perpetuate.

                        • +2


                          Whether it's legally enforceable as a fraud or not, it is a fraud by the common definition (obtain advantage by deception)

                          So how many years should someone get for including their bathroom renovation in with their kitchen renovation?
                          How many years jail?

                          I would like to live in a society where the police and legal system take on these frauds rather than allowing them to perpetuate.

                          I would like to live in a society that did not help to invade Iraq and kill 600,000 Iraq's…. but….

                          If you want to change it - you can.
                          Start reading and reviewing cases, put those cases in front of your MP. And push the Politicians to provide the Police and courts might get more resources to go after fraud, or argue for a changing of the legislation so its easier to prosecute fraud.

                    • @IHatePeople: Can you explain how it was different for Belle Gibson, she defrauded people out of money and People who gave to her never expected a return. How does the fact that you expect to be repaid in anyway diminish the original fraud?

                      Argument 2 is a terrible precedent - it's too hard to prosecute so we don't. Meanwhile Australians are losing $630 million a year to scams.

                      Argument 3 doesn't help anyone. The money is gone, the scammer has it. There are two victims here (at least)

                      • +3


                        Can you explain how it was different for Belle Gibson, she defrauded people out of money and People who gave to her never expected a return.

                        I don't know enough about the Belle Gibson case, and I'm not going to research it to provide you answers, because you are not paying me.
                        I don't know if she was charged criminally or whether ASIC acted via Civil courts (or both). I don't know if she was running a charity or not.
                        I don't know what the ACTUAL claims were when she was raising the money. I don't know if her structure was a company or herself when making the claims.
                        In the end its not a loan/fraud case like Op described, so it doesn't really apply to anything I've said.

                        you expect to be repaid in anyway diminish the original fraud?

                        It does not diminish - you can pull the loan and demand full repayment (in which case you are 'whole' again).
                        If you do Not then you are accepting the loan change.
                        The courts will not accept someone who lends money for 5 years, knows about fraud (though its a change of use, which in this case - there is no contract, and hence no one including the courts or the police, know the conditions which the money is lent), gets to end of the loan term and then tried to charge someone criminally.
                        The Court system (including Equity) demands you take action when you discover the fraud, not when you could be arsed, or when its in your advantage to do so.
                        If you discover the fraud and think well I'm just going to take the reward (interest on that loan) for as long as possible, the courts rightfully question that.

                        Argument 2 is a terrible precedent - it's too hard to prosecute so we don't.

                        So we should prosecute even if we know the Police, etc would 100% lose?
                        You do realise the court has limited resources. A Magistrate/Judge can only hear so many (and pump out rulings) in so many cases.
                        There are only so many Police and jail cells, etc.
                        Legal aid provides most of the funding for criminal cases, so your taxes might rise to pay for the extra cases….
                        If you are happy for taxes to go up, then you can make that argument. As most people hate lawyers, judges and police I doubt that will happen.

                        Also you are assuming Op. is telling the truth. What happens if he is lying?
                        The proper way is to document the loan - everybody knows this.The Police need real evidence to prosecute.

                        Meanwhile Australians are losing $630 million a year to scams.

                        Scammers cost Australia 0.2% GDP, however how much is loan/fraud scenario as reported by Op? (I mean $30M of that is dating scams alone)
                        Also there is offshore scams - how do you propose we prosecute those?
                        Using $630M figure has nothing to do with this type of 'fraud'.

                        Argument 3 doesn't help anyone. The money is gone, the scammer has it. There are two victims here (at least)

                        My 3rd Argument is "Also you lent money via a -> Personal loan <-"
                        I don't know who the two victims are…..
                        But personal loans are not secured. If you don't like that - secure the loan. Pay 3rd parties directly, check borrowers credit and employment, - Take pro-active steps.
                        Why should the Courts (and society) go to massive expensive (it is estimated that a 2 day case costs around $14,980 in taxpayer money, a defendants lawyer might charge $2-$3k additionally), because you couldn't be bothered to even write a contract out?

                        does the fact that you expect to be repaid in anyway diminish the original fraud?

                        It can if you accept that payment (because you are getting a reward in terms of interest). As stated before - if you don't like the 'fraud' - pull the loan.

                        You seem to be angry about 'fraud' in general (rather than particularly to Op's case) and tbh its not a debate Im that interested in engaging about.

                        • -1

                          @IHatePeople: I don't know how you're so invested in trying to take me on for saying that fraud should be a criminal offence that the police take seriously.

                          • +2

                            @dinna89: I don't think he's disagreeing with you that fraud should be a criminal offence. He's simply saying in OP's case it would be impossible to prove in court. In a civil proceeding, the court must be satisfied on the "balance of probabilities" that one version of events is more plausible than the other version based on all the evidence provided. In a Criminal proceeding, prosecution requires proof "beyond a reasonable doubt", which is far more difficult to prove.
                            Since OP has 0 proof - no contract, no documents, not even a witness. He can't even convince the judge in a civil court that his story is more believable than the accused. How can he possibly convince 12 jurors in a criminal court unanimously beyond a reasonable doubt?
                            The police won't act on it if you can't give them anything to back up your claim, even if they want to take it seriously.

                            • @smallstakes54: You don't need to convince 12 jurors, what percentage of cases go to trial?

                              My take is that fraud's of this nature should be investigated by the Police. I find it hard to believe OP has zero proof, and the standard response to these types of questions is that the police don't care and that it's a civil matter. Police should step in because I very much doubt these scam's are one off events, and police should intervene for the public good

                          • +1

                            @dinna89: Someone took time to educate you and the best thing you can say is “you’re so invested in trying to take me on” smh

                            • @lookingforTV: Perhaps i didn't phrase it well, is this better?

                              I don't know how you're so invested in the concept that fraud should be a criminal offence that the police take seriously.

        • +2

          He needs Judge Judy.

  • +9

    you got played for a chump

  • +1

    Just Bikies.

    • +3

      this calls for Bikies²

      • +1

        We have to go deeper. Bikies^3

  • -1

    Your best friend is your wallet. There is little you can do, you have nothing for security.

    • +2


      • $10K in OP's wallet is better than an unsecured loan to a "friend" who transfers money to some random.

      • Because, to some, it doesn’t talk back and can talk to it.

      • +1

        Think he’s talking about the influx of Bellboy wallet deals recently

        • I don't think she is.