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YOU ARE HERE: Home > News > 2005 > Don’t be Conned: OFT Warns of Loan Fee Scam |
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Don’t be Conned: OFT Warns of Loan Fee ScamThe Office of Fair Trading today warned UK consumers against being caught by a loan advance fee scam originating from Canada and targeting British borrowers. Advertisements have been appearing in local newspapers across the country offering fast loans regardless of credit history. The adverts, which have a freephone number to call, are usually placed in the classified sections of free or local newspapers. Consumers responding to the ads are told that their loan has been agreed but before they can have the money they have to pay a fee to cover insurance of the loan. The applicant is told they must pay this fee by money order via Western Union or Money Gram. Once the fee is paid the applicant doesn’t hear from the company again and never receives the promised loan. Some victims have lost up £4,000 says the OFT. One such victim is Mrs. Lockwood who applied for a loan after seeing an advert in her local paper. She was told that her application for a £3,000 loan had been approved but that she would need to pay £300 insurance. She paid the money but never received her loan. When she tried to call back the freephone number to complain the number had been disconnected. Mrs. Lockwood then received another call from someone purporting to be from the company who said she would need to pay more money to cover taxes in Canada. Luckily this time she refused and alerted the OFT. The OFT has called on newspapers to be vigilant against this scam. OFT Chairman, John Vickers, said: "Any newspapers who are approached to put adverts of this sort in their papers should immediately contact the OFT and give details of who contacted them and the advert they attempted to place". Mr. Vickers also counsels, "Consumers should be wary of any business which requires an advance fee to be paid via Western Union or MoneyGram". The scam is being run by professional criminals and the OFT is also concerned that organised criminal gangs may be using the personal details collected from victims of this scam to commit further fraud. It is currently working closely with the Canadian authorities to take action against these fraudsters. The OFT It is urging consumers who have been contacted in this scam to report it to them by calling 08457 22 44 99 or by emailing enquiries@oft.gov.uk.
Published Wednesday January 5th 2005 |
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