Payday loans companies’ identity checks ‘too cursory’
I have been the victim of an almost identical fraud to that in your article about short-term loans company Lendingstream.co.uk. Four payments – £601.50 in total – were made from my Barclays debit card to Lendingstream. Three in December and a further payment in January. Barclays has washed its hands of this in exactly the same way as Lloyds, simply on the grounds of Lendingstream’s claim that I am a bona fide customer.
I have sent two letters recorded delivery to Lendingstream telling them that they are in breach of contract. These have not been acknowledged. I feel very let down by Barclays and have lost total confidence in its fraud department. MH, Leyburn, North Yorkshire
As in the previous case, Lendingstream ignored your protests until I flagged up the unauthorised debits with its press office. Then, with miraculous alacrity, it discovered that you had been a victim of ID fraud and sent you a refund. Barclays, meanwhile, says it held you liable because you’d only queried one of the payments so it assumed the previous three were by agreement, but confesses it did not investigate properly. Lendingstream, which promises loans in as little as 10 minutes, insists it carries out rigorous checks and has cut fraud by 90%. The Financial Ombudsman Service says there has been a steady increase in complaints about fraudulently set up accounts with short-term loans and payday lending companies, and suspects that, because of the fast turnaround, checks are too cursory.
This month the Office of Fair Trading announced a crackdown on payday lenders after a year-long review identified widespread malpractice. The 50 biggest lenders, who make up 90% of the market, have been given 12 weeks to clean up their act or face losing their licences, and the OFT is investigating more who were found to have committed serious breaches.
To show its resolve, it revoked the licence of MCO Capital Ltd because inadequate security checks allowed fraudsters to misuse details of 7,000 individuals. Anyone who suspects they’ve been a victim can contact the ombudsman and their complaint will be investigated if the company does not respond within eight weeks.
If you need help email Anna Tims at [email protected] or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.
Money | guardian.co.uk
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