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.
Get ahead of the fraudster
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.
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.
A report containing detailed information on a person’s credit history, a record of an individual’s (or company’s) past borrowing and repaying, including information about late payments and bankruptcy. It also includes all applications a person has made for financial products and whether they were rejected or accepted. Your credit report can be obtained by prospective lenders to determine your creditworthiness.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.