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You can find the current article at its original source at http://www.guardian.co.uk/money/2013/mar/19/payday-lender-shut-identity-fraud
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| Version 0 | Version 1 |
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| Payday lender shut down by OFT over identity fraud | Payday lender shut down by OFT over identity fraud |
| (10 days later) | |
| Payday lender MCO Capital has been shut down by the Office of Fair Trading, after it failed to stop fraudsters taking out loans using more than 7,000 stolen identities. | Payday lender MCO Capital has been shut down by the Office of Fair Trading, after it failed to stop fraudsters taking out loans using more than 7,000 stolen identities. |
| The regulator, which stripped the online lender of its consumer credit licence in summer 2012, has now banned it from making loans to UK consumers after finding that the company lacked the necessary skills, knowledge and experience to run a consumer credit business. | The regulator, which stripped the online lender of its consumer credit licence in summer 2012, has now banned it from making loans to UK consumers after finding that the company lacked the necessary skills, knowledge and experience to run a consumer credit business. |
| In August 2012, the OFT took action to revoke MCO's licence, but the company, which operated as Paycheckcredit, Popcredit and Speedcredit, charged interest rates of more than 5,000% APR, was still allowed to trade as it launched an appeal. | In August 2012, the OFT took action to revoke MCO's licence, but the company, which operated as Paycheckcredit, Popcredit and Speedcredit, charged interest rates of more than 5,000% APR, was still allowed to trade as it launched an appeal. |
| The closure of the company comes after it decided to withdraw that appeal. However, it is sill appealing the OFT's decision to fine it £544,505 for breaches of the Money Laundering Regulations 2007. | The closure of the company comes after it decided to withdraw that appeal. However, it is sill appealing the OFT's decision to fine it £544,505 for breaches of the Money Laundering Regulations 2007. |
| The news follows the recent OFT payday lending report, which detailed evidence of widespread unfair business practices in the sector and gave lenders 12 weeks to clean up their acts. | The news follows the recent OFT payday lending report, which detailed evidence of widespread unfair business practices in the sector and gave lenders 12 weeks to clean up their acts. |
| In MCO's case, the OFT found that it had failed to put in place adequate identity checks for loan applicants. This failure led to it being targeted by fraudsters, who used the personal details of more than 7,000 individuals to apply successfully for loans totalling millions of pounds. | In MCO's case, the OFT found that it had failed to put in place adequate identity checks for loan applicants. This failure led to it being targeted by fraudsters, who used the personal details of more than 7,000 individuals to apply successfully for loans totalling millions of pounds. |
| The regulator also said that the firm had engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for repayment. The company had ignored its requests to stop this practice. | The regulator also said that the firm had engaged in unfair business practices by writing to people who it was aware may not have taken out loans, asking unequivocally for repayment. The company had ignored its requests to stop this practice. |
| The OFT's director of credit, David Fisher, said: "'Removing MCO's licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices. | The OFT's director of credit, David Fisher, said: "'Removing MCO's licence is a timely reminder that payday and other lenders risk losing their licences if they engage in unfair business practices. |
| "The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people," he added. | "The way MCO chased consumers for debts they did not owe was unacceptable and caused unnecessary distress to many people," he added. |
| The debt charity Citizens Advice said it had helped lots of people who had been caused "significant distress" after being pursued by MCO for loans they had never taken out. | The debt charity Citizens Advice said it had helped lots of people who had been caused "significant distress" after being pursued by MCO for loans they had never taken out. |
| Citizens Advice chief executive, Gillian Guy, said: "We provided evidence to OFT when it launched its investigation last year and continued to see problems with the lender, so we are pleased they have taken action today." | Citizens Advice chief executive, Gillian Guy, said: "We provided evidence to OFT when it launched its investigation last year and continued to see problems with the lender, so we are pleased they have taken action today." |
| The removal of MCO's licence means it is no longer allowed to recover outstanding debts itself, but callers to its helpline are told that it has passed on its outstanding loans to a company called Webloans Processing Limited, which is using Northern Debt Recovery to collect payments from borrowers. | The removal of MCO's licence means it is no longer allowed to recover outstanding debts itself, but callers to its helpline are told that it has passed on its outstanding loans to a company called Webloans Processing Limited, which is using Northern Debt Recovery to collect payments from borrowers. |
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