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Christmas conmen target hard-up families by setting up BOGUS payday loan companies

Hard-pressed families ­desperate for Christmas cash are being cruelly ripped off by ­bogus payday loan companies.

Victims are duped into handing over an upfront fee of up to £60 to process applications for online loans which never materialise.

They are then redirected to the web page of an authorised lending site – but the owners of the legal sites turn out to be in the dark about the trickery.

It is also believed unscrupulous sites trick “borrowers” into handing over bank details and other personal information which can be exploited or sold.

The Sunday People can reveal the crooks use slick online adverts, complete with pictures of smiling Santas, snowmen and presents, to lure the unwary with ­offers of short-term loans, offered without checks and ­supposedly paid out the same day.

They promise festive fun on the cheap with tempting slogans like: “Spread the cost of Christmas – how much would you like to borrow?”

Dodgy: The sites are designed to dupe the unsuspecting and desperate

In reality many of these websites are part of a shameful world-wide scam which tries to fleece people who are often already struggling for cash.

In one con, police had to be called to a genuine business address which had been used as a front for a rip-off loan website – after angry victims turned up demanding their “admin fee” back and asking why loans had never been paid out.

Debt experts believe 1.4 million Britons will take out payday loans to cope with the cost of Christmas.

Even when the loans are for real, interest rates can be an ­extortionate 3,000% a year.

Lending industry bosses last night urged regulators the Financial Conduct Authority to investigate what it called a “plague” of dodgy websites that promise easy cash with no checks.

Russell Hamblin-Boone, of the Consumer Finance Association, warned: “A plethora of risky Christmas-themed sites have sprung up to trap unsuspecting ­borrowers with promises of loans that offer no protection.

“The result is that people have their money stolen by illegal lenders.”

A few clicks on Google brings up a string of genuine-looking sites advertising Christmas loans at sky-high rates.

PaydayXmas promises “quick cash” with an APR of 3,257% and asks: “How much do you need?”

The website, registered in Douglas, Isle of Man, claims to be a trading brand of an authorised lending broker licensed by the Financial Conduct Authority.

An investigator sent to the broker’s registered address at an ­accountancy office in Wanstead, East London, was told police had been called to control people ­angrily complaining that they had not received loans.

The accountancy firm said the scam had been traced to an ­address in Birmingham, where the money had been banked and then sent to India.

Xmas Loans for People with Bad Credit

At another lending website, Christmas Loans Poor Credit, potential customers are offered payouts ranging from £100 to £1,000 and told: “Apply now and you can enjoy your festive season with full joy.”

The site adds: “Make Christmas more amusing with instant Christmas loans.” But borrowing £225 over 28 days will cost a total of £292.50, an equivalent APR of 2,857%.

People who apply are directed to a page for a genuine credit broker with a registered address in Southend-on-Sea, Essex.

Another site called Spread the Cost of Christmas asks: “How much would you like to borrow?”

Applicants are directed to another site called Little Loans, an authorised credit broker whose parent company Digitonomy is based in Chester.

Digitonomy director Daniel Ashton insisted his company was NOT ­involved in Christmas payday loans.

He said: “Our products are typically loans of around £2,000 over two years.”

His co-director Tim Moss added: “In terms of people borrowing to pay for Christmas, it is not something we would ever recommend.”

A “Need 12 Month Loans” site offers Christmas loans with a 1,990 APR, ­visitors are told: “Have a blast with your beloved ones this Christmas.” Elsewhere on the site, complete with an image of Santa and a Christmas tree, it says: “It is the season of joy.

“If you want to make this Christmas the most celebrated one and have funds in your pockets for the same, then just think of applying for Xmas payday loans. Have a blessed time with your loved ones without having to worry about your financial woes.”

Get Christmas Loans Today

The site is linked to another Financial Conduct Authority-licensed firm whose registered business address is a shop in Finchley, North London.

Another website, Get Christmas Loans, suggests it is linked to an ­authorised loan broker called Cash Lion, which is a trading name of ­legitimate UK company Loan Machine.

Loan Machine director Chris Burgoyne revealed that the Christmas Loans website was nothing to do with his company, based in Gorleston, Great Yarmouth, Norfolk. He said: “We don’t own that site. If they have got a link to us, they shouldn’t have and I will investigate it instantly. It could be a scam.

“We’ve had problems for years with people impersonating us and charging us fees and charging ­customer’s fees.”

Mr Burgoyne said his firm had been targeted so often a ­warning had been posted on the Financial Conduct Authority website, saying fraudsters commonly tried to use their registered name.He added: “We have been targeted for years, hence we got the FCA and the police involved.

“At the end of the day it is a waste of their time linking to us as we are not going to pay them any money. We try and do everything above board.

“We have not got any Christmas sites at all. If people are using our name, then it is very immoral.”

Industry leaders believe that ­unofficial websites, with promises of no credit checks and instant cash, are all in breach of industry rules.

Rudolph’s Readies

The Consumer Finance Association, which represents major short term lenders, has reported a string of Christmas loan websites to the regulator.

Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said Google had taken down some of the sites.

But he added: “As quickly as you get them taken down others crop up under different names. They are duping people. Our advice is simple. Never give your details to a website that you don’t know to trust.”

Debt charities say no one should ever pass over details to sites unless they are certain they are genuine.

But they say regulators need to do more to crack down on some practices in the high cost sector.

Debt-stricken families are advised to seek help from credit unions – regulated co-operatives whose members can borrow from pooled deposits at rates of around 12% a year.

An estimated 1.8 million people use payday lenders, typically taking out six loans a year, at £260 a time.

The Money Advice Trust said: “If you’re struggling to cope with Christmas costs, the best thing you can do is seek free advice from a charity-run service like National Debtline as soon as possible.”

National Debtline can be ­contacted on 080 8808 4000 or www.nationaldebtline.org.uk

And new legal lenders are exploiting Christmas desperation

Alarm has also been raised about new legal payday lenders exploiting ­families desperate to afford Christmas.

The firms, set up because established lenders are scaling back before a New Year crackdown, charge huge interest.

“The sole purpose of the sites is to entice people into applying for credit they may not be able to afford,” said the Consumer Finance Association’s Russell Hamblin-Boone.

“There are no credit checks and no health warning about the risks. All this is in breach of the regulations.”

Jane Tully, of the Money Advice Trust ­charity, said: “Lenders and credit brokers should not be trying to exploit the festive season in a cynical attempt to market loans and several websites have been reported to regulators.”

Under Financial Conduct Authority rules from January 2, lenders ­cannot charge more than 0.8% a day in interest and fees and also cannot charge more than £15 should ­borrowers default.

The FCA said it is aware of the new Christmas loan websites.

Have you been the victim of a pay day loan scam? Please get in touch and email feedback@people.co.uk

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Christmas conmen target hard-up families by setting up BOGUS payday loan companies

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