Loan Fraud: Taking Out a Loan With No Intention of Paying

Taking Out a Loan With No Intention of Paying

This written piece could also be entitled, “Doing a Runner On Owing Money”

And also, “How We Commit Loan Fraud”.

Interested yet?

You should be, as there are things we do that in the eyes of a bank or lender, could be viewed as loan fraud.

But first, here is a question I have been asked many times over the years:

Can I Take Out a Loan and Then Just Do a Runner to Another Country and Never Pay the Loan Back?

The answer: Sure you can, but it is not that simple.

First you need to be approved for the loan. Which usually means you have a job here in the UK, you live here, may have family here, bank here, and are fairly established here in the UK.

So do you get the loan and then run off?

How much of a loan is worth packing your life up and just moving on?

Then the follow-up questions are, will the bank chase me for payment, and how would they find me?

The wheels grind slowly, buy yet they grind.

If you move to the EU there are for now, laws allowing cross-country collections. If you were to moved outside of the UK and EU, the collection process gets more complicated.

Accounts/debts get sold onto collection agencies around the world all the time, which they can then be collected in that country. So you really have not skipped out on anything.

In addition, just because you have left the country doesn’t mean the debt is no longer owed. Should you return to the UK, the collection process can start all over again.

Then the question, can I return to the UK owing money in the UK.

Yes, you can return to the UK owing money, as long as no criminal charges have been brought against you.

Technically taking out a loan with no intention of repaying it, is not in the true sense fraud. It is also not criminal, it is ethically wrong, and some may debate morally wrong, but not a crime. At the time the bank approved the loan, you were loan worthy.

Now the question, but how will my creditors find me should I do a runner?

They may not find you, but in this “ever changing world we live in” as per Sr Paul, there are ways. Many collectors use social media to find debtors; things like Facebook, Twitter, etc. You’d be surprised how you can be found.

A bit scary isn’t it, “Big Brother is Watching”!

So why go through all that in the first place. Take out a loan and pack up and go. It would need to be a big loan to make life worth living somewhere else.

But lets’ look at some real ways people fraud a bank or lender.

Inflating Income

The old inflating income trick. The bank asks how much you earn and you bump it up a few grand a year.

Simple enough, until the bank asks for wage slips, bank statements, etc, and they may. However, they may not.

If they do, there are those that make changes on these statements when they copy them, and that my friend is true fraud.

Now one could argue if the lender does not follow through with due diligence and request actual statements, they are at fault and a party to the fraud, but you would be wrong.

Inflating income is a big way people commit fraud for loans.

Will they go to jail if caught? Probably not, these are small offences and not worthy of the court’s time. However, larger fraud cases may be.

Identity Theft

Using someone’s else’s identity is fraud as well. In addition to being ID theft.

As many application for loans are done online, the lender may never actually see the borrower. It is all done online, via credit scores and the such, so you just use someone else’s name and address, and your bank account details.

This also ties in with creating false credit reports. This is difficult to do, but it can be done, and there are companies offering fresh starts by creating new credit histories for you. Still a bit of fraud.

Not Disclosing Facts

Here is a bit of a grey area, the non-disclosure of some facts.

You may be asked a question on a loan application form asking if you have ever been bankrupt. You answer no, but perhaps you were bankrupt but in another country.

The loan application is quite broad, it is not specifically asking, have you ever been bankrupt in the UK, but you make the assumption that is what they are asking.

Technically that is non-disclosure, which can be considered a form of fraud if found out.

How will “they” find out you ask again, they have their ways. But again, they may never find out.

This is not the only way people can commit fraud on applying for a loan, and people do forget and make mistakes when completing loan applications, these are mistakes and not meant to be fraudulent.

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<strong>What is Our Criteria For Applying?</strong> 
Every lender on our website has their own specific criteria by the basics are mentioned below and you must have a guarantor to be eligible. Simply select the lender of your choice and you will be taken directly to their website where you can apply. You will be required to submit your details including:<li style=”text-align: center;” data-mce-style=”text-align: center;”>Name (must be over 18 as the borrow, 21 or 25 as the guarantor)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Residence (your chances will improve if your guarantor is a homeowner)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Employment status (must be employed or on a pension)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Income (earning at least £600 per month and able to make repayments)</li><br /><li style=”text-align: center;” data-mce-style=”text-align: center;”>Monthly expenses (not have too many loans open or in major debt)</li>
You will then be asked to include the details of your guarantor and as mentioned above, this is usually someone who you know and trust and wants to help you with your personal finances. Ideally, a guarantor with good credit will maximise your chances of being approved based on the idea of ‘if someone with good credit trusts you, well we can too.'<strong>How Much Can I Borrow From Guarantor Loans?</strong>Guarantor Loans gives applicants the chance to borrow £500 to £15,000 depending on the lender. Some lenders we feature like Buddy Loans only have a maximum loan value of £7,500 and TFS Loans is the only lender that stretches up to £15,000.Factors that can influence the amount you can borrow revolve around having a good guarantor. One that is a homeowner, with solid employment, income and good credit rating will maximise your chances of borrowing the largest drawdown possible.The lenders featured on Guarantor Loans see a homeowner as someone who has already gone through the rigorous process of credit checking and affordability and if they can afford a house, they should be able to act as a guarantor for you.By comparison, having a guarantor that is not a homeowner offers slightly less security and means that amount you can borrow is slightly less too.Higher amounts may be available to those who already have a better than average credit rating, are homeowners themselves and a repeat customer with the lender who has already paid their loan on time. To apply directly with your lender of choice see <a href=”” data-mce-href=””>direct lenders</a>.<strong>What Does The Guarantor Have To Do?</strong>Upon completing an application, the lender will typically send you a <a href=”” data-mce-href=””>pre-contract loan agreement</a> and SECCI (Standard European Consumer Credit Information form) which will highlight the terms of your loan. You and your guarantor will be required to review the terms of the loan, including the loan drawdown, fees, repayment dates and responsibilities – and this can be signed via an online verification process using your email and mobile phone.The lender will usually carry out an individual phone call with you and your guarantor to ensure that you both understand the responsibilities and what is required of you – notably that if you cannot make repayment, your guarantor will be required to pay on your behalf. Further to some additional credit and affordability checks, funds can typically be transferred within 24 to 48 hours (or sometimes on the same day).<strong>Are Guarantor Loans Available For Bad Credit Customers?</strong>Yes, even if you have a history of adverse credit, <a href=”” data-mce-href=””>CCJs</a>, bankruptcy or IVAs several years ago, you can still be eligible. The idea is that you are using your guarantor and their financial history to ‘back you up’ and give your loan extra security. However, it is noted that your guarantor should have a good credit score and consent to co-signing your loan agreement.<strong>How Soon Can I Receive Funds?</strong>Guarantor Loans works with lenders that can facilitate funds within 24 to 48 hours of approval, or sometimes on the same day.When your funds are successfully transferred, most lenders working with Guarantor Loans will send the full amount to the guarantor’s debit account first. This is a standard security measure carried out by lenders to ensure that the funds are going to the right person and confirms the involvement of the guarantor. The guarantor usually has a ‘two week cooling off period’ where they can decide to pass on the money to the main borrower or they can change their mind and return the funds with no extra charges.