CASH-strapped people desperate for a loan are being targeted by fake lending companies and used as money mules, it has been revealed after a Limerick mother told the Limerick Post how her account was frozen three days before Christmas.
The city woman told the Limerick Post that she plans to return to college as a mature student, but as a lone parent in receipt of a State payment she feared she would not qualify for a loan from any of the main banks.
“I Googled ‘fast loans’ and came across a company advertising quick decisions, so I applied.
They came back almost immediately and said I had been approved but that I needed to have an amount of cash in my account as part of the conditions for the loan, to create a credit history,” the Limerick woman, who asked to remain anonymous, told the Limerick Post.
“I didn’t have the amount they wanted available – it was several hundred euro and this was just before Christmas. But when I told them that, they said it was just a formality and they would deposit the money needed in my account for a short period to tick the boxes and then take it out again.”
Confident that the loan amount would materialise, the Limerick mother set about Christmas shopping and was stunned to discover her bank account had been frozen.
“It was three days before Christmas and the bank wouldn’t even tell me why my account was frozen. I had to get second-hand toys from a friend as gifts for my child. I was left with nothing.” she said.
Subsequently, the woman had her funds released by the bank.
The Limerick Post consulted a financial compliance expert who confirmed that banks can legally freeze accounts without explanation, “usually because there is some investigation into someone who has had dealings with the account”.
Limerick Crime Prevention Officer Sergeant Ber Leetch said that the particular scam is not one that has been aired in Limerick before, but she is in no doubt that while there are legitimate loan companies advertising their services online, there are also fraudsters waiting to take advantage of desperation.
“Money launderers want vulnerable people to act as money mules and someone applying for a quick loan is advertising themselves as vulnerable,” she told the Limerick Post.
Sgt Leetch said that people should be very wary of giving their account details to anyone and certainly wary of anyone who offers to deposit money in that account in such circumstances.
“Ask yourself the sensible questions. Why would anyone put their money in your account on trust? If it looks too good to be true then it is.
“This kind of transaction is an attractive prospect for people who need money but if her bank hadn’t copped on to it, she could have been used again and again for larger amounts.
“In the end anyone allowing their account to be used can face criminal prosecution, whether or not they were aware of what was going on,” Sgt Leetch said.
The financial compliance expert advises that anyone wishing to apply for a loan, particularly to a lender outside of the regular banks, should consult the Central Bank list of licensed lenders to be sure the loan company is legitimate.
