'Thousands hit by loans fraud," The Sunday Times

Sunday, October 31, 2010

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A widespread identity fraud saw thousands of people being chased by debt collectors for loans they never took out, reports James Silver

Thousands of people have found themselves being chased by debt collectors for loans they never took out in a widespread identity fraud.

Claire Heritage, a financial adviser, came home from work in August to find a letter from Help Loan demanding she repay £513 (including fees) for a £300 loan it claimed she had taken out.

“I’d never heard of Help Loan and I certainly hadn’t borrowed any money,” she said. “But when a letter like that is addressed to you, you feel like you’re responsible.”

Help Loan is a trading name for loans company MCO Capital Limited, and Heritage quickly discovered the forum on moneysavingexpert.com was buzzing with people who had received identical letters.

MCO trades as helploan.co.uk and balanceloan.co.uk, providing short-term high-interest “pay day loans”.

After reporting the matter to the police, who gave her an incident number, Heritage wrote a registered letter — and sent an email — to MCO, stating that her name and details had been used fraudulently and that she had not taken out the loan.

Earlier this month, however, she received a second letter from Help Loan, this time demanding immediate payment of £726, including “a late payment fee of £213”. Once again, she wrote a registered letter, explaining that she had been the victim of fraud.

A few days later, she received yet another demand, adding that “her” account had been handed to debt collection agency Intrum Justitia.

City of London police is investigating the alleged fraud, which it believes “has affected 9,000 people in the UK”. It said: “Fraudsters are suspected of using people’s details to obtain fraudulent loans with the Finnish-based loans company, MCO Capital.”

Attempts by Money to contact MCO proved fruitless but Adrian Kibbler, an MCO spokesman, claimed the firm had been “a victim of organised crime”. He said it had received more than 9,000 inquiries from the public.

(The Sunday Times, 31st October 2010)

Posted by James Silver - On Sunday, October 31, 2010

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