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Armagh woman scammed out of £1,000 in online scam

An Armagh woman lost around £1,000 to this scam when applying for a loan on a fake website.

Now, the Trading Standards Service (TSS) is warning people to steer clear of scam loan companies who take upfront fees but fail to provide credit or offer clearly unsuitable credit alternatives.

Laura Kane, Trading Standards Inspector, said: “In one case, a consumer from Armagh lost around £1,000 to this scam when applying for a loan on a fake website.

“The scammers promised her a loan of £3,000 but demanded that she make advance payments via money transfer voucher and by credit card to cover fees and to show that she could make repayments.

“She believed that the scammer’s reasoning for making advance payments was plausible but ended up losing a lot of money for a loan that never existed.”

Ms Kane added: “A person will typically reply to an advert online or a social media site for a fast loan and will have their application approved regardless of their credit history.

“Before they receive the loan, they are told they must pay an upfront fee to cover administration or insurance costs for the loan. Once this fee is paid, the victim does not usually hear from the company again and the loan is never received.”

TSS is also seeing an increase in another loan scam involving online credit broker websites. These are websites that promise to find loans for people with poor credit histories, but are not lenders themselves. Often buried in the small print is a clause allowing the broker to charge £50 to £75 to find the person a loan, on top of an annual interest charge as high as 3,000%. In the worst cases, the site shares the person’s bank details with as many as 10 other companies, which then also debit the same sum from their account.

TSS has received a large number of complaints from consumers who have had hundreds of pounds debited from their account by companies they have never dealt with. Despite paying the fees, the majority of consumers did not receive a suitable loan or were simply directed to a payday loan site.

Trading Standards Inspector Laura Kane added: “Demands for payments upfront should serve as a warning sign as genuine loan companies would never ask for payments to be made in advance. The object of applying for a loan is to receive money and pay it back over time in affordable instalments. Scammers prey on anyone they think may be an easy target, such as those in need of money quickly, who have bad credit or have been turned down for loans before.”

The Trading Standards Service advises people to be vigilant when dealing with or taking calls from loan companies that want upfront fees and who are not interested in consumers’ credit history.
TSS’s list of ‘dos and don’ts’ to help consumer’s spot scam loan companies are:


· Do be very careful when dealing with loan companies that charge upfront fees.
· Do be cautious if a loan company cold-calls you.
· Do some research about the business offering the loan – look for proper phone numbers and physical addresses and ask for information in writing.
· Do check that the company has a credit licence on the Consumer Credit Register at:


· Don’t believe adverts which indicate a loan is ‘guaranteed’.
· Don’t give out your card details ‘for security reasons’ as the company may then debit your bank account without you knowing.
· Don’t wire 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.

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