A payday loan lender who found itself the victim of identity theft fraudsters has been closed down by Office of Fair Trading (OFT).
The fraudsters impersonated in excess of 7,000 people, whilst the payday lender where said to have ?allowed? this to happen by not having proper checking systems in place.
The company, MCO Capital, which traded under the name of Help Loan had only started operating in August 2010 and within 3 months had been cheated of more than ?1.5m, which it then attempted to recover by sending aggressive payment collection letters to the people who were victims of the identify theft scam.
The firm has also been fined ?544,000, with the firm breaking the rules on money laundering by failing to check the identities of its borrowers and failed to put adequate procedures in place making the business vulnerable to fraud, which inevitably caused unnecessary distress and inconvenience to the thousands of identity victims of the fraudsters.
In October 2010 the firm said it had stopped chasing the people whose identities had been stolen and not really taken out loans with Help Loan, however the OFT said the firm had in fact ignored the OFT?s requests to stop sending letters to the victims of the fraud.
MCO Capital who currently operate online as Speed Credit, Paycheck Credit and Pop Credit, now has 28 days in which to appeal against the withdrawal of its consumer credit licence.
The law is currently being changed, via the Financial Services Bill to give the OFT the power to stop immediately any rogue money lenders, debt collectors and debt advice firms from operating, allowing the OFT to take harder and quicker action against firms who break the rules or who are not properly licensed.
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Source: http://www.loans4.co.uk/blog/?p=1624
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