Canadian credit and lottery scam
At a recent meeting, the Office of Fair Trading (OFT) and the Specialist Crime Directorate, Metropolitan Police asked the NNWA to help to raise awareness for some of their campaigns (such as the Canadian lottery). The OFT and Metropolitan Police are particularly keen to raise awareness amongst the elderly as evidence does suggest that the fraudsters are targeting older people
The following is the first alert concerning the Canadian lottery scam.
Canadian credit: don't fall foul of loan fee scam
January 2005
UK consumers seeking credit are being stung for thousands of pounds by a new advance fee scam originating in Canada.
Advertisements have appeared in local newspapers offering fast loans regardless of credit history. The adverts, which have a free phone number to call, are usually placed in the classified sections of free or local newspapers. Consumers who respond to these adverts are told that their loan has been agreed but before they can have the money they will need to pay a fee to cover insurance of the loan.
The consumers are asked to pay this advance fee by money order via Western Union or Money Gram. Once this advance fee is paid the consumer never hears from the company again and the loan is never received. The OFT is aware of victims who have lost up to £4,000.
The OFT is calling on newspapers to be vigilant against this scam and be wary of placing adverts which do not comply with the new Consumer Credit (Advertisements) Regulations 2004, which govern what form and content an advert for credit should take.
The OFT is working closely with the authorities in Canada to take action against these fraudsters and is urging consumers who have been contacted in this scam to report it to the OFT by calling 08457 22 44 99 or by emailing enquiries@oft.gov.uk (see note).
The OFT is also concerned that organised criminal gangs may be using the personal details collected from victims of this scam to commit further fraud.
John Vickers, OFT Chairman, said: "This loan scam is run by professional criminals. Consumers should be wary of any business which requires an advance fee to be paid via Western Union or MoneyGram to secure a loan.
"Any newspapers who are approached to put adverts of this sort in their papers should immediately contact the OFT and give details of who contacted them and the advert they attempted to place."
Case study
Mrs Lockwood applied for a loan after seeing an advert in her local paper. She was told that her application for a £3,000 loan had been approved but that she would need to pay £300 insurance. She paid the money but never received her loan. When she tried to call back the free phone number to complain the number had been disconnected.
Mrs Lockwood then received another call from someone purporting to be from the company who said she would need to pay more money to cover taxes in Canada. Luckily this time she refused and alerted the OFT.
For more information see the Office of Fair Trading's website: www.oft.gov.uk
NOTE: The OFT is unable to give specific advice to consumers in relation to this matter. For further advice consumers should contact either their local trading standards department or in Scotland, Wales, Yorkshire and South West England, Consumer Direct on 08454 04 05 06.