Warning to avoid loan scam telephone calls and websites

Highland Council’s Trading Standards Team and Nairn Citizens Advice Bureau are warning Highland consumers to look out for scam operators offering loans online and through direct marketing phone calls.  Several Highland consumers have contacted Trading Standards or their local Citizens Advice Bureau in recent weeks after being stung by scammers taking upfront fees and then failing to go on and provide the promised loan.

Trading Standards investigations have had some success in disrupting the scam operators’ activities, but both Trading Standards and Citizens Advice are stressing the importance of getting the message out to the public to prevent consumers being conned in the first place.

Gordon Robb, Highland Council Trading Standards Manager explained: “The telephone scams involve consumers receiving ‘cold calls’ offering easy-access loans in return for an advance fee.  After the fee is paid, the ‘Loan Company’ does a disappearing act and the consumer having paid the often substantial fee never hears from them again.  With the culprits often based overseas, it can be virtually impossible for the consumer to get their money back.  Other website operated scams operate in a similar manner, with consumers keen to receive a loan coming across what look like genuine websites with well-designed graphics, through internet searches, but with the same outcome for anyone tempted to obtain a loan in this manner.”

Fees can vary but the worst recent example seen recently by Trading Standards and Nairn CAB involved a consumer paying a total of £500 in advance fees for a non-existent loan of £2500.

Gill MacLean, Manager of Nairn Citizens Advice Bureau said: “We are seeing more and more cases at the CAB of people who have fallen victim to rogue lenders like this. Sadly, these operators know that many people have been hit by the recession and the welfare reforms and so are short of cash and in need of a loan, and so they are preying on people who are vulnerable. If you have been a victim of such lenders it’s very important that you report them to Trading Standards, so as to help others avoid the same trap. But the most important advice we can give people is not to fall for cold-calling in the first place. If you need to borrow money, take a bit of time to find out which is the fairest lender, and make sure you read all the terms and conditions before you sign up. Never give your financial details to anyone who has just called you on the phone. You can get free advice from the CAB on borrowing and debt management.”

Gordon Robb explained the action taken by Highland Council’s Trading Standards Team: “As the people involved are usually based abroad, it is seldom feasible for us to attempt to take them to court or take other formal action.   Instead, we look to disrupt their activities.  In this case, my officers had six such scam sites taken off-line through the co-operation of the legitimate companies who are innocently hosting or acting as registrants for the websites.  This action will significantly disrupt the activities of these crooks and help protect Highland consumers, but being realistic we know that others will spring up in their place, making it essential that consumers are alert to the practice. As with all such cases the information and intelligence obtained from these case has been shared with Police Scotland, who I understand is liaising with forces elsewhere in the UK.”

The six websites removed from the internet by Highland Trading Standards are:

Although not technically illegal, upfront fees are often an indicator that the lender is not legitimate.  Citizens Advice and Trading Standards are urging consumers to be on their guard and never do business with a loan company without making checks about them and to be very wary about any firm charging upfront fees.

Consumers can get free advice from their local Citizens Advice Bureau, the Citizens Advice Consumer Service national helpline 08454 040506, or from Trading Standards on 01463 228700 or trading.standards@highland.gov.uk

3 Sep 2013
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