A UK based payday loan firm has been recently banned and given a massive fine for selling loans to fraudsters using other people’s names, over seven thousand of them, and then harassing the victims and demanding that they pay the money back.
The company in question is MCO Capital Ltd and they received a massive £544,000 fine from the Office of Fair Trading and they have also had their consumer credit licence revoked for failing to verify the 7000 loan applicants and also ignoring all warnings from the office of fair trading for harassing the victims.
It has been said that the MCO had an extremely bad system for vetting the loan applications which made it very easy for fraudsters to steal a victim’s identity and make a successful application for a loan. This resulted in fraudulent loans amounting well within the millions being made fraudulently which the company then harassed the victims for. They failed to follow the money laundry regulations which made it a requirement for loan lenders to verify and make the correct identity checks for all their applications.
It was also discovered the MCO Capital made contact with the victims, who did not even know they had these loans in their name, demanding payment in no uncertain terms. When the office of fair trading found out about this they demanded MCO to stop this practice, a request that they seemed to ignore. In the judgment it was stated that MCO did not possess the skill and knowledge to run a consumer credit business. They failed to implement standard practices and procedures which made them vulnerable to fraud. It was also said that the method that MCO used to contact the fraud victims to collect their so called debt caused great concern to the victims and the inconvenience to many thousands of people.
The financial fine that has been placed on MCO sends out a very strong message to other loan providers that these practices are unacceptable.
If a consumer finds that they are being pursued by a lender for a debt that does not belong to them, they should put it in writing to the lender or the debt collection agency and make it clear why the debt does not belong to you.
This is one of many complaints against the payday industry and it is hoped that there will be a cap on charges implemented sooner rather than later. Often fees of £20 can be paid on every £100 loan taken out and this can spiral if payments are delayed.