Steer clear of potential loan scams warns Highland Trading Standards

The Highland Council’s Trading Standards are warning consumers to be on their guard against cold call telephone calls offering loans. 

In particular consumers should be vigilant when dealing with or taking calls from loan companies who ask for upfront fees and who do not ask questions or make checks about the potential borrowers’ credit history. 

There has been a dramatic increase in complaints about loan scam calls with some callers originating from outside the UK and EU.

Problems have also been identified with some credit brokers.  These firms charge upfront fees of £70-£100 to organise loans for consumers and Trading Standards has experienced an upsurge in complaints about them.  The main issues are:

Gordon Robb, Highland Council’s Trading Standards Manager is particularly concerned for vulnerable consumers who may be targeted.

He said: “Consumers contacting our Service appear to have either fallen for loan scam telephone calls or have signed up with credit brokers only to find their application has been ignored or delayed after the credit broker fee has been paid over.

“Credit brokers and loan providers in the UK are required to be licensed by the Office of Fair Trading and consumers can check if a company has the necessary license before they go ahead and do business with them. 
All current credit licenses can be viewed online at the on the Consumer Credit Register at: http://www.oft.gov.uk/.  If they are not registered with the Office of Fair Trading then we would strongly advise consumers not to do business with them as this could well turn out to be a scam loan or broker company.”

Mr Robb further explains: “Credit laws in the UK do allow licensed credit brokers to charge a fee for their services.  If however the loan application should fall through after a six month period or if the credit broker fails to provide any service at all then a consumer is entitled to a full refund of all or most of their monies. 

“Not all consumers are aware of their rights and that they can claim the fees back.  In some instances we have found consumers have paid out hundreds of pounds in credit brokers’ fees and not realised that most of this money can be reclaimed.  When our Service has been contacted we have been able to provide assistance to consumers and in most cases secure refunds."

The Highland Council Trading Standards want to safe guard other consumers from falling for loan scams and become better informed before they consider contracting over the phone for a loan application. 

They advise the following 'dos and don'ts' checklist to help consumers: 

Further advice on loan scams or consumer rights can be found at:  www.direct.gov.uk/consumer or consumers can speak to an advisor on 08454 04 05 06.

For free, confidential debt advice service is available for those facing financial difficulties through Highland Council Money Advice Service on 0800 090 1004 or by email at: money.advice@highland.gov.uk  or visit their local citizens advice bureau which can be found by visiting http://www.citizensadvice.org.uk/

Consumers can also visit or write to:  The Highland Council Trading Standards Service, 38 Harbour Road, Inverness. For further Highland Trading Standards news please go to: http://www.highland.gov.uk 

5 Mar 2012
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