|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |    25th of February 2018
|   Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |   Companies  |  

Loan News feed Loan News

All Financial News feed All Financial News




Help Loan closed after breaching money-laundering rules

Bookmark and Share

by Jan Harris
Help Loan closed after breaching money-laundering rules

Payday Loan company MCO Capital has been closed down by the Office of Fair Trading (OFT) and fined £544,000 after failing to check the identity of its borrowers.

The firm, which traded as Help Loan, was targeted by criminals and cheated of more than £1.5m by the fraudsters due to its negligence.

The criminals stole the identities of 7,000 people and used their personal details to secure loans worth more than £1.5 million pounds from the firm.

Help Loan failed to check that the identities were genuine, breaking regulations designed to reduce the risk of businesses being used for money laundering purposes.

The firm then wrote to the victims of the identify theft, demanding repayment of the loans, even though it was aware that the people it was contacting may not have taken out the loans.

This action led the OFT to find that MCO had engaged in unfair business practices.

David Fisher, Director of Credit at the OFT, said: “MCO’s failure to put adequate procedures in place made it vulnerable to fraud.

“The way in which MCO then wrote to consumers to collect debts caused unnecessary distress and inconvenience to thousands of people.”

The OFT has revoked MCO Capital’s consumer credit licence and the firm has 28 days in which to appeal against the decision.

Meanwhile, Medway Council in Kent is trying to stop payday loan companies setting up shop in its area, by seeking a change in the planning laws.

It claims that the 23 payday loan shops already operating in Chatham and Gillingham have led to an increase in local debt.

The council is asking the government to create a new planning category for holders of a Consumer Credit Licence who are not also regulated by the Financial Services Authority.

Discuss this in the Finance Markets forums

Story link: Help Loan closed after breaching money-laundering rules



News posted: August 9, 2012

Financial Services:





Related financial stories to: Help Loan closed after breaching money-laundering rules:
Previous: «
Next: »

Visited 3614 times, 2 so far today

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Tags: ,