Scam alert - don't be tripped up

No-one in their right mind would enjoy a visit from a debt collector, but imagine how you'd feel if you received a letter threatening such a call when you didn’t even know the debt existed.

Recently around 5,000 people have had such an experience, receiving letters from either a UK pay day loan company or their appointed debt collectors, demanding they pay back a loan which they don’t know anything about.

In this particular pay day loan scam fraudsters had applied for loans of up to £300 in someone else’s name with their correct address and date of birth. However, the phone number and bank details for the loan belonged to the fraudster, netting them the money in the unwitting person’s name.

This is no small fraud and the pay day loan company claims to have lost around £1.5 million before it realised what had happened. So just how can you deal with something like this?

Many, I know, would just ignore the demand letter and bin it. Not a good move as more letters will follow and you could find enforcement action is taken and your credit file marked down as non-payment.

Some will pick up the phone and plead “I have never borrowed from this company” only to be told by the debt collectors, “But you agree we have your correct name, home address and date of birth, so you must have done, now pay up”.

So, no matter how miffed, narked, upset or just plain confused you are, you really need to deal with demands for payment on debts you don’t recognise promptly and effectively as there may be more trouble ahead if you don’t.

How to stop enforcement if you are a victim of fraud

The Office of Fair Trading Debt Collection Guidance states that it is unfair to send demands for payment to an individual when it is uncertain that they are the debtor in question so the obvious first step is to write to the lender claiming you owe them money and state you are a victim of fraud and you dispute the debt.

Protecting your identity

As you have just become a victim of identity theft you need to do some homework and make sure nothing else untoward is going on and that this is a one off.

First get a credit report to make sure all is correct on your file. Apart from looking for information about loans and credit cards or even mobile phone contracts, have a look for details of any searches on your file.

For example if ‘Easy Credit Bank’ has searched you and you’ve not applied to them for a loan or credit card then this should ring warning bells. More on credit reports.

Get ahead of the fraudster

If you’re worried about identity fraud, then you may want to be placed on the Protective Registration For Individuals. The cost for this is £14.10 including vat per year.

Once on the register, when an application for credit is made on your behalf there will be additional checks to those already in place making it far more difficult for the fraudster to access your details.

You will also find that your applications for credit will take a little longer to process, but it could prove to be well worth it in the long run.

Also think about changing passwords and generally tightening up your identity protection by shredding all paperwork with details on it and of course not giving out sensitive information like passwords and dates of birth over the phone or in emails.

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Reasonable advice. Fairly obvious but still a useful reminder.