Would you be willing to pay money for nothing in return?
Advance fee fraud is when scammers target victims and ask them to make payments for goods, services or loans that do not materialise.
As part of Scams Awareness Month, West Yorkshire trading standards is warning the public of a serious rise in the number of people being defrauded by advance fee loan scams.
Loan scams happen when a victim is asked to pay an upfront fee for a loan. A person will typically reply to an advert for a fast loan they have seen on the internet, or in a local newspaper. Their application will be approved quickly regardless of their credit history. Before they receive the so called loan, they are told they must pay an upfront fee to cover insurance for the loan, or to cover administration costs. Once this fee is paid, the victim does not hear from the company again and the loan is never received. Often the fraudster asks for the fee to be paid using international money transfer services like Western Union or Ukash, knowing that these methods cannot be reversed. Perhaps more alarmingly, often the fraudster will request the victim’s bank details to take payment, therefore creating the opportunity for them to take multiple payments before the victim has realised they are caught up in a scam.
The Consumer Credit Act states that a licensed credit broker, who fails to provide a promised loan, may only retain £5 of any fees taken upfront. All other monies must be refunded on request from the customer. In the event that a consumer pays money to a non-genuine credit broker, the chance of successfully claiming any portion of this fee back is unfortunately very slim, as many of the fraudsters originate from outside of the UK and use fake addresses leaving the victim unprotected by UK law.
David Lodge, Head of West Yorkshire Trading Standards said “Never send money off or give your bank card details to persons that you do not know, or checked their credentials – and in the case of a loan provider, that they are authorised by the Financial Conduct Authority (FCA). Be wary of requests to wire money, transfer via PayPal or to use overseas payment methods”.
If you would benefit from free information or advice regarding any debt issues then contact Step Change on 0800 138 1111 (freephone including all mobile networks).
Notes to editors:
The SAFER (Scams and Frauds Education for Residents) workshops are running in local communities in Leeds and Bradford, highlighting the activities of rogue traders, scammers and fraudsters. Anyone interested in attending should contact Lanson Moore on firstname.lastname@example.org or Carrie Wilson on email@example.com
For more information on the Financial Fitness Initiative please contact: Dawn Mason, Education and Community Engagement Officer, on 0113 393 9819 / firstname.lastname@example.org