West Yorkshire Trading Standards have warned the public of a “serious rise” in the amount of people being defrauded for borrowing money, as Christmas approaches.
Fraudsters are offering people loans without the usual credit checks or assessments of affordability and are using various trading names to try prove they are legitimate, authorised lenders.
When borrowing money, payment is usually demanded upfront of around £100 - £200 - depending on the amount of the loan. In the case of the fraudulent loans, the people in question are demanding this payment to be made in the form of electronic money or through international transfers, knowing that these cannot be traced or reversed.
Councillor Bill Urry, of the West Yorkshire Trading Standards Committee, said: “Never send money off or give your debit/credit card details to persons you don’t know, or persons you haven’t checked out first. Be wary of requests to wire money to another country or use overseas payment methods.”
The international transfers are usually made for places like Ukash or Western Union.
Some transfers have been done in person, with borrowers meeting to handover cash to people they don’t know.
Fake documentation has even been issued claiming to be authorised by the Financial Conduct Authority.
The Consumer Credit Act says that a broker who fails to deliver the promised loan within a six month period can only keep £5 of the amount taken for their service.
All other monies must be refunded on request to the customer. However, many fraudsters operate outside of the UK and use fake addresses leaving the public and legitimate credit brokers unprotected by UK law.
If you are experiencing difficulty with debt, contact the National Debtline on 0808 808 4000 or online at www.nationaldebtline.co.uk
Consumers can report the scams by contacting the Citizens Advice Consumer Helpline on 08454 04 05 06 or at www.citizensadvice.org.uk