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Council warns of text loan scam

by Lib Dem team on 22 October, 2014

Stockport Council is warning residents about a text message scam involving a loan that is not paid out.
Earlier this month a Stockport resident received an unsolicited text message from a business purporting to be a loan company.

The message stated: ‘Dear Customer, the loan you applied for recently has been approved. The loan will be paid to you today. Please call (phone number) to receive the money into your bank’. The message was sent by a withheld number.

The victim was persuaded to pay £100 via PayPoint e-voucher on the promise that £500 would be put into their account. The business then asked for a further £200 to secure a loan of £690. The victim realised that it was a scam and did not pay any more. However, the scammers only gave fictitious contact information and the victim is now £100 out of pocket.

The Council’s Trading Standards advises residents never to respond to unsolicited text messages, phone calls or emails offering a loan. These may be received after leaving a phone number on a website. People may be asked to make payments into a bank account or via a money transfer business before a loan can be approved or paid to you. Once the initial payment has been made, and the loan withheld, the scammers will often try to contact the person again to ask for further payments before the loan can be released. Regardless of the number of payments made, the loan never materialises.

Councilor Martin Candler, Stockport Council’s Executive Member for Communities and Sustainability, said: “This type of scam targets people who have difficulty obtaining credit. These are often the people who can least afford to lose money to the scammers and I would urge residents to be on their guard against this type of fraud.”

All loan brokers and lenders are required to be licensed by the Financial Conduct Authority (FCA). If the business is not on the register at the FCA website it is likely to be bogus.

Victim of bogus loan brokers can report the details to Action Fraud on 0300 123 2040. People can also contact the Financial Conduct Authority Consumer Helpline for advice on 0800 111 6768.

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