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Tue 8th Apr, 2008
Posted in Bad Credit, Banking, Borrowing, Card fraud, Consumer Credit, Consumer debt, Credit Card, Credit record, Financial news, Fraud, Identity theft, Personal loans, Spending, UK Finance, Unsecured loans at 1:22 pm by Steve Smith
It has been revealed that Facebook users are putting themselves at serious risk of becoming an unwitting victim of ID theft. Even posting just a few private details on your Facebook page can give fraudsters enough information to cause serious damage.
Using the information that they have come across on people’s Facebook pages, fraudsters are able to open bank accounts and take out credit cards and personal loans in their victim’s name.
The warning was sounded by a BBC1 consumer show Watchdog. The show conducted an experiment in which they set up a fictional identity on Facebook. The Watchdog team then invited 100 random people to become friends with their newly created fictional character ‘Amba’.
35 of those invited to become Amba’s friend immediately accepted the request despite knowing nothing about her. By accepting, the victims allowed the fictional Watchdog character to view any private details that they had posted on their page.
Details which could easily be accessed included date of birth as well as hometown. The Watchdog team then used these details in order to obtain more private details about their victims from other publicly available websites.
With this information Watchdog then opened up an online bank account in their victims’ names as well as successfully applying for credit cards.
One of the victims, Scott Gould, stated that he was “very surprised” by what Watchdog managed to do despite having only the slightest bits of information about him.
Users of Facebook as well as all other social networking sights are advised to be very careful when posting their details. Fraudsters often leave a trail of bad debts behind them, in Your name. Not only is the onus on you to prove that you are not responsible, it is hard work correcting your damaged credit rating.
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Fri 28th Mar, 2008
Posted in Bank charges, Borrowing, Card fraud, Consumer Credit, Consumer debt, Financial news, Fraud, Missed payments, Overdrafts, Personal debt, UK Finance, Unsecured loans, mortgages at 12:15 pm by Steve Smith
Since their introduction building societies and banks have been claiming that chip and pin technology is foolproof. However a new flaw at the heart of the design to prevent fraudsters from stealing your money has been exposed.
Many cash withdrawals are being carried out using cards that do not have a security chip and the shocking thing is that it is the banks themselves that are allowing this to happen.
This is how it works. Currently there are roughly 140m cards in circulation in the UK and every day an average of 7m withdrawals are made from UK cash machines. Now it is only to be expected that some of these cards will be slightly faulty therefore if banks were to reject cards with a slight fault they would then be inundated with complaints from angry customers who could not withdraw their own money.
This has left the door open to fraudsters who can use cloned bank cards that do not come with a chip to get their hands on other peoples’ cash. This leaves bank claims that the system is foolproof as completely false.
The banking industry trade association for payments has admitted that an undisclosed number of the UK’s 60,500 cash machines will allow cloned cards to withdraw money provided the cloned card is used with the correct pin number.
Because bank customers are not protected from fraud in the way that credit card holders are, account holders could find themselves fleeced of their entire balance with no redress. Not only are people finding themselves without the money to meet their home loan repayments or rent, they are going into unauthorised overdrafts and forced to borrow money to cover the shortfall.
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Wed 21st Nov, 2007
Posted in Borrowing, Consumer Credit, Consumer debt, Financial products, Fraud, Personal loans, Property, Secured loans, UK Finance, mortgages at 1:50 pm by Steve Smith
Many homeowners are being encouraged by their brokers to lie about their income in order to secure large mortgages. To lie about your income in order to secure a loan is a punishable offence and could land you with a hefty fine or even a jail sentence.
The whole story revolves around a care worker employed by the citizens advice bureau who claims she was advised by her broker to lie about her salary when trying to secure her mortgage.
Sandra Ashcroft, 59, told her bank she received a £35,000 salary as a mid-wife in order to secure a home loan of £102,000 in 2003. She then applied to increase that mortgage to £122,000 after telling the bank she earned £80,000 working in the public services. Ms Ashcroft actually only earned between £3000 and £5,500.
What Mrs Ashcroft did was highly illegal and she was charged for obtaining money transfers by deception. She was given a six-month suspended sentence but the judge said that there was evidence to suggest that she had been steered towards giving misleading information.
The danger often lies with the temptation offered by self-cert loans and mortgages. These were created for self-employed workers or business owners who don’t always have records of their income. Whilst these loans are vital for those who have an income that doesn’t come from a salaried job, they open a window for people to try to obtain credit they cannot repay by lying on their application.
So if you are thinking of lying on an application for a mortgage or even if your broker is encouraging you to lie do not be tempted. This is a very dangerous route to take and if you are caught out you could face losing your house, ruining your credit rating and even a jail sentence. So always consult the mortgage company or even a lawyer if you are unsure about specific details on your loan application form.
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Mon 1st Oct, 2007
Posted in Bad Credit, Borrowing, Card fraud, Consumer Credit, Consumer debt, Credit Card, Credit record, Fraud, Identity theft, Personal loans, UK Finance, Zero percent cards, mortgages at 1:28 pm by Steve Smith
Identity fraud is a growing concern in the UK with many Britons falling victim and costing the economy an estimated £1.7 billion a year. One way that people can fall victim is by leaving unused credit card accounts open. According to Apacs, at the end of 2006 31.5 million people in the UK held an average of 2 personal credit and charge cards. However, according to the research there are around one in three cards that are no longer active, which can cause concern for some. One reason why someone may no longer use a credit card account is because they originally opened the account to take advantage of the 0% interest on balance transfers and once the balance was paid off they never used the card because of the high interest rate, or because they transferred the balance over to another 0% credit card once the offer has expired. This means that there are many people who are moving their balances from one account to another account and often forgetting to close the account once it is no longer in use.
If you fail to cancel your cards once you stop using them you may end up forgetting that you ever had them. Often if your account has no activity you will most likely end up not receiving a statement to remind you of the account. So if someone gets a hold of your information and changes the billing address, you will easily miss that and fall victim to identity fraud. Once someone has your details they can easily go further and take out expensive personal loans or even mortgages in your name. Typically these fraudsters will very quickly default on payments, leaving the black marks on your credit record. Often the first you will know of the matter is when you yourself are turned down for loans or mortgages.
One way of protecting yourself is by checking your credit report, and if you find in-active accounts listed on your report, then you should close them the ensure you do not end up a victim of fraud.
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Fri 27th Jul, 2007
Posted in Bad Credit, Banking, Borrowing, Buy to let, Consumer Credit, Consumer debt, Financial news, Fraud, Homeowners, House buying, Housing news, Personal debt, Property, Rental property, Secured loans, UK Finance, mortgages at 12:05 pm by Steve Smith
The devastation caused by mortgage fraud is becoming a major problem in the UK. It costs lending companies and homeowners millions of pounds each year. However, most of it cannot be prosecuted, because many of the fraudsters are from foreign countries that do not collaborate with UK enforcement authorities.
Mortgage fraud takes many forms, including stealing property using various methods of deception, obtaining a money transfer by deception, signing mortgages, and selling third party homes.
Victims are left with no hope of proving that they were not involved in the scam and are accused of hide the proceeds of the scam. Most victims hope that they are protected by banks and loan lenders, but sadly this is not always the case. Many people have been left with 40 year mortgages in their name and what appears to be a history of bad debts and defaults on secured loans.
The Department of Productivity, Energy and Industry (DPEI) closed a buy-to-let scam, in 1995, which promised to help investors make money in the property market. Three companies linked to the scam ended up at the High Court, following confidential investigations by the DPEI.
These companies took “substantial sums of money” and promised that they would help clients to build a portfolio worth £1 million a year.
In 2005, DPEI Minister Gerry Sutcliffe said: “These companies knew that their clients, who had all invested substantial amounts of money, couldn’t make anything like the returns that were promised. The schemes were completely misleading and set up with the sole aim of parting people from their money.”
Consumers are warned to avoid any investment scheme that promises too much, or very little risk. They are also warned to avoid anything that asks for personal information before explaining the company’s intent.
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Wed 25th Jul, 2007
Posted in Bankruptcy, Borrowing, Consumer Credit, Consumer debt, Financial news, Fraud, Homeowner Loans, Homeowners, House buying, Housing news, Insolvency, Personal debt, Personal loans, Property, Secured loans, UK Finance, interest rates, mortgages at 1:29 pm by Steve Smith
Many UK borrowers are putting their financial future, and possibly risking jail time, by creating fake payslips. This will let them borrow bigger mortgages and loans, reduce their interest payments, and lower fees.
The Institute of Payroll Professionals (IPP), is seeing an increasing number of websites which now offer ‘duplicate’ payslips, without taking time to check whether the customers information is valid.
These websites cannot legally verify the details provided by consumers looking to buy fake pay slips as the only official parties who would prove salary information – the payroll departments of their employer and the HMRC – are bound by the Data Protection Act,” the IPP website confirms.
This will increase debt and insolvencies as more homeowners are struggling to make payments they cannot afford. Analysts are worried that, if this becomes a wide spread practice, that it will create a false image of the economy as more and more people apply for bankruptcy and IVAs.
Richard Fiddis, Managing Director, at the global information solutions company Experian, said:
“Insolvencies rose by two-thirds in the second quarter of this year, while IVAs, which make up almost half the total, soared by over 150 per cent.”
“One of the most striking differences between those opting for bankruptcy and those for an IVA is illustrated by socio-economic analysis,” continues Fiddis. “Experian’s Mosaic consumer segmentation system shows that people in the ‘Happy Families’ group, comprising largely young families, are more than 60% more likely to be tempted by an IVA.”
These numbers will increase as people continue to ‘fake’ mortgage and personal loan applications.
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Thu 21st Jun, 2007
Posted in Borrowing, Consumer Credit, Financial news, Fraud, Insurance, Personal loans, Spending, UK Finance at 8:55 am by Steve Smith
Today many people are falling victim to some of the worst scams; here are just a few of the most recent scams:
High-Risk Investments
This scam works when consumers are contacted by letter, phone or e-mail and are offered a chance to invest in shares, fine wine, art or high valued items. The items listed are promised to increase in value and the price that is offered is over-priced and difficult to sell-on. This type of scam costs the UK public £490 million each year with just about 90,000 people falling victim to this scam.
Pyramid Selling and Chain Letters
Consumers are asked to become a member of a scheme often by friends or relatives and are promised a large commission earning if they recruit others to the scheme. They claim that if enough new members join, that they pyramid will grow which will allow other members to make money. However in order for every member to make enough money, there will need to be an endless supply of new members. This scam is costing the UK public £420 million per year with 480,000 falling victim.
Loan Scams
Adverts are placed promising cheap loans regardless of credit history. The consumer is then told that their loan has been agreed and that before they can have their money that they need to pay a fee to cover the insurance on the loan. However, once the fee has been paid the victim never hears from the company again. This scam costs the UK public £190 million each year and hits 110,000 victims.
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Thu 14th Jun, 2007
Posted in Bad Credit, Banking, Borrowing, Consumer Credit, Consumer debt, Financial news, Fraud, Personal debt, Personal loans, Spending, UK Finance at 11:17 am by Steve Smith
The public has been alerted regarding a scam that is offering consumers to work as ‘mystery shoppers’. Many consumers have lost thousands of pounds to this scam.
The way this scam works is through emails or postings where the recipients are told that they have been chosen as a secret shopper and will be paid a certain amount of money for their first assignment. The first assignment is that the recipient must pose as a potential customer at a number of different retailers and evaluate their services. They are sent a cheque that they then pay into their bank along with instructions to complete one of their assignments by posing as a customer of a money transfer agency and wire £1,500 to a fake relative at an address in Canada. However, the cheque that is received is a counterfeit and the money that is wired to Canada is collected by the scammer.
The victims of this scam can end up being held liable to pay not only the £1,500 transfer but could end up being charged by their bank whilst the cheque is being processed. Some victims have been forced to take out loans to cover the costs of the scam, leaving them in debt, rather than with the wages promised.
This scam exploits the promise of paid work to defraud victims and as scams become more sophisticated consumers are told to be more wary of offers and deals that come through that seem to be too good to be true. To avoid falling victim to a secret shopper scam remember that you should not take on face value the validity of a genuine looking cheque from a stranger. You should never be pressurised into sending your own money in any type of exercise and you should never send money to a stranger using a money transfer service.
Ignoring these warnings can lead to bad debts and misery to unwary consumers.
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Mon 4th Jun, 2007
Posted in Banking, Borrowing, Card fraud, Consumer Credit, Financial news, Fraud, Identity theft, UK Finance at 11:23 am by Steve Smith
It has been announced that many banks will start to issue bank customers hand-held chip and pin card readers over the next six months as an attempt to cut back on online fraud. Because of the success of the chip and pin credit cards and debt cards on the High Street, big banks are hoping that these hand-help home devices will prevent online banking fraud from increasing.
The device is the size of a calculator and is relatively easy to use, as you simply insert your debit card into the hand-sized device. Once the card is inserted you then enter your unique eight-digit pin number into the bank’s website. The reader will generate a new number every time you insert your debit card, which you then use to access your online bank account. Because the device can generate up to nine million random numbers it makes it extremely difficult for fraudsters to access the online account.
Some of the first customers to be given these hand-held card readers are those customers who already have active online bank accounts. Barclays Bank has the biggest programme, with up to two million online users. They will start to send out the devices to 500,000 online customers starting in July. Other big banks, such as the Royal Bank of Scotland and NatWest will start issuing the devices this week to thousands of their online customers. Other banks, such as Halifax and Nationwide, intend to issue similar devices later this year.
It is hoped that these devices will not only beat fraud but also facilitate customers in managing their money. Customers will be able to act fast if they see that they have gone overdrawn and eventually clients may be able to apply for credit or other bank services online.
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Fri 18th May, 2007
Posted in Borrowing, Consumer Credit, Fraud, Identity theft, UK Finance at 10:37 am by Steve Smith
Identity theft is a crime where a criminal obtains your personal information such as your credit card numbers, bank information, address, and phone number or birth date. With this information the thief can then access your financial accounts, open accounts or apply for credit under your name and basically steal your identity. Identity theft is becoming a rising crime with many people falling victim. However, there are steps that you can take to reduce the chances of this crime happening to you. By understanding where an identity thief may obtain information, or how they obtain your personal information you can minimise the possibility of becoming a victim to identity theft.
Although different methods are used, some of the most common practices, or ways that criminals obtain your information is by digging through your bin. By digging through your trash, the thief is hoping to find a discarded bank statement, credit card bill or other pieces of mail that will have your personal information. That is why it is important that when you dispose of your statements or other documents that you shred or tear it up before tossing it into the bin.
Phishing is a technique that is done over the Internet via email. The criminal will pretend to be a representative from a financial institution and will send you emails regarding your account, stating that they have some issues with your account that need to be sorted out and they attach a link that will lead you to a website where you are able to fix the problem. However, when you log on to the website it will appear to be official, however it’s a total scam where they will ask you to verify your personal information which the thief can then use. Never respond to emails from a bank or credit card company, as they would never email you if they had any issues. A legitimate company would mail you or phone you regarding any problems.
By making yourself aware of some of these scams, you will protect yourself from falling victim to this increasing crime. You can search online for more information on how to protect yourself from these types of criminal acts.
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