Loan scam misery for worst off

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West Yorkshire Trading Standards is warning the public of a serious rise in the number of people being defrauded as they try to borrow money.

As Christmas approaches many people who are struggling to make ends meet are turning to the internet or falling victim to telephone calls offering to provide loans.

The fraudsters offer to provide loans without any credit checks or assessments of affordability. Various trading names are used and are often clones of legitimate, authorised lenders.

Payment is demanded upfront to arrange a loan, usually around £100 - £200 depending on the amount of the loan. The fraudsters demand for payment is made in the form of electronic money or international money transfers like Ukash or Western Union, knowing that these methods cannot be traced or reversed. Some would be borrowers have even been asked to meet at a specified location to handover cash to persons they don’t know. Occasionally payment is made by direct bank transfer. Fake documentation has even been issued purporting to be authorised by the regulator the Financial Conduct Authority to which the first loan instalment will be made.

The Consumer Credit Act says that a broker who fails to deliver a promised loan within six months can only keep £5 of the fee taken for their service. All other monies must be refunded on request from the customer. Many of the fraudsters originate from outside the UK and use fake addresses leaving the public and legitimate credit brokers unprotected by UK law.

Coun 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.”

If you are in difficulty with debt contact the National Debtline on 0808 808 4000 or go on-line at www.nationaldebtline.co.uk

Consumers can report these scams by contacting the Citizens Advice Consumer Helpline on 08454 04 05 06 or on-line at www.citizensadvice.org.uk.

The credit crunch, rising personal debts and current financial insecurity mean that understanding finances and developing skills to make informed decisions are more important than ever. In response to this and potential challenges brought about by welfare reform, Trading Standards is working with West Yorkshire residents, delivering a programme of money management workshops to adult learners, designed to engage residents in a series of interlinked, interactive sessions relating to finance.

A five week course, increasing money management and budgeting skills in local residents, is on offer in Kirklees, up skilling residents in spotting and stopping scams and fraud, building knowledge around banking and budgeting, recognising the tactics of loan sharks and illegal lenders, avoiding doorstep criminals and, as a result, strengthening and building financial resilience of local communities.

For further information about this project or to arrange sessions in your community, contact Dawn Mason on 01133939819 or email dmason@wyjs.org.uk