Scam loans warning


Lincolnshire Trading Standards is warning local residents to be wary of cold callers who claim to represent a loan company.

The service received two complaints last week from people who received calls telling them they have been granted a loan, but in order to access the money they needed to pay a fee up front by Ukash vouchers.

A Lincoln resident reported that following enquires he made about a loan, he received a telephone call from what he believed was the genuine company offering him the finance. The caller asked the consumer to pay £100 by Ukash vouchers as a first payment which, still believing he was dealing with an official company, he paid. The caller then rang back and said there was problem with the consumer’s credit history and he needed to pay a further £300 by electronic transfer. The consumer became suspicious and contacted Lincolnshire Trading Standards.

In a similar case, a Bracebridge Heath resident was also offered a loan and the caller asked for an advanced payment of £100 which the consumer paid by a Ukash voucher. The caller then asked for a further £200 transfer fee which the consumer refused to pay. Neither of the complainants received loans from the bogus company.

Senior officer for Lincolnshire Trading Standards, Angela Kane, said: “Investigations have revealed that in both of these cases fraudsters used the details of a firm registered to carry out consumer credit activities to convince them that they work for a genuine, registered firm. This is what we call a ‘clone firm’ and fraudsters usually use this tactic when contacting people out of the blue, so we are urging people who are looking for a loan to be wary, especially if they have been cold called. Consumers are advised never to transfer money using services such as Ukash or Western Union when taking out loans and always be on your guard if someone cold calls you and offers you a loan.”

No genuine loan company will ask for a fee to be paid in advance. These fraudsters often ask for the money to be sent in the form of Ukash vouchers or by Western Union transfer, two ways money can be transferred easily and with little traceability. Ukash and Western Union are both legitimate companies who regularly issue warnings themselves about these sorts of scams.

Don’t transfer money to loan companies using money transfer services when applying for loans.

Don’t go ahead with a loan if a company approves it and then demands a fee before you get the money.

Be very cautious if a loan company cold calls you.

Do some research about the business offering the loan – look for correct phone numbers and physical addresses and ask for information in writing.

If you believe you have been a victim of a scam report the matter to Lincolnshire Trading Standards via Citizens Advice Helpline on 03454 040506 or visit

Alternatively, If you think you have been approached by an unauthorised or clone firm, or contacted about a scam, you can also contact the Financial Conduct Authority Consumer Helpline on 0800 111 6768.