Payday Loan ScamsLoan Payday Fraud
There are two types of payday loan fraud: when a creditor or his collection agency chases a customer for a loan taken in his or her name in a fraudulent manner (and of which he or she normally knew nothing), or when a continuing payments agency (CPA) has been established in a fraudulent manner against his or her credit-note.
This means that if there is not enough cash in a credit customer's current accounts to pay back the loan at the due date, the creditor can continue to ask his own institution for all or part of the loan.
As a rule, the application for a payday loan means the disclosure of person-related data such as name, adress and bank account. Fraudsters in some cases have supposedly been able to take out a loan on behalf of another with only his name and adress. OFT has also expressed concern about powerful proof of unsustainable credit - with too many individuals receiving credit they can't afford, and if they can't pay back, they are emboldened to do so.
That makes their pecuniary difficulty even greater and can lead to genuine poverty and difficulty for a considerable number of payday loan clients.