My long, lonely fight to prove I am NOT a bad debtor
... after a fraudster took out a loan in my name and made my life a misery
I HAVE never defaulted on a loan. I own my own home and car. But my credit rating has been rendered so toxic that I would struggle to buy a sofa.
And it’s all thanks to a UK payday lender called Lending Stream. In January last year, it lent £590 to a fraudster armed with my name and date of birth.
The rest of the information the scammer gave — address, phone number, occupation, etc, bore no relation to me. The thief disappeared with the cash and Lending Stream put a Liverpudlian debt-collecting agency on my trail.
I rang the agency. I had only to give basic personal details before they acknowledged thefraud and stopped pursuing me.
The agency revealed the fraudster had given the wrong home address, a bank account in another name, a generic email address and claimed to work for the NHS. The fact I am a journalist and author takes seconds to check on Google.
It seems no one at Lending Stream did full checks. Momentarily I felt vindicated. But for the following 12 months, despite a welter of calls, emails and official rulings, Lending Stream refused to remove its ‘debt unpaid’ notice from my credit file, branding me a liability.
On the agency Noddle’s database, I scored just 1/5 — ‘very poor’. I first attempted to discuss my case with Lending Stream directly. The contact number on its website is a recorded ‘hold’ message that eventually connects to an overseas call centre. No one there was able to make any decisions. Each time I rang, I was promised a call from their ‘fraud section’. No call came.
Finally I found a way to contact Lending Stream’s UK office in North-West London. The person answering the phone gave me an email address. This address bounced back to me.
I took my case to the Financial Ombudsman Service (FOS). It found in my favour in August. A helpful lady there wrote telling me Lending Stream had acknowledged the loan was scammed. The FOS also said Lending Stream had agreed to repair my credit rating, apologise in writing and pay £250 compensation. The FOS warned me that it has had to ‘be quite persistent with them to ensure credit records are correctly changed’.
Five months on, Lending Stream had done nothing.
The ombudsman does, sadly, seem to lack some regulatory teeth. It told me it has no legal power to investigate whether the company is lending without proper identity safeguards, and no ability to take sanctions against organisations that lend without proper safeguard.
I felt utterly stymied — even as an investigative journalist used to prising open organisations and databases. I’ve never managed to talk with any of the people who run Lending Stream. It seems I’m not alone.
I filed Freedom of Information requests with official agencies to discover how many others have complained about Lending Stream, its U.S.-based owner Gain Credit and its other UK brand, Drafty. The FOS says more than 6,700 people have contacted it with concerns about Gain Credit or its brands. In around half of the cases it took up, the FOS upheld the complaints. But of course, it can’t back its rulings by investigating miscreants fully. I turned to the lenders’ financial watchdog, the Financial Conduct Authority (FCA). When I asked if I could file a complaint about Lending Stream, it said it didn’t accept them from individuals, only organisations. I asked if any organisations, such as the FOS, had complained to it about Lending Stream but got no answer.
So I filed a Freedom of Information request asking the FCA whether it has received any such complaints against Lending Stream or Gain Credit. The FCA rejected the request, saying it would cost too much money and time. I exercised my right to appeal against the FCA’s refusal. The authority’s internal reviewer, Edward Pegg, gave a new reason for refusing.
He said the FCA ‘could not confirm or deny’ that it held the relevant information, because either would breach its duty of confidentiality to organisations that might (or might not) have complained. I went back to the Ombudsman and asked whether they had complained to the FCA about Lending Stream or Gain Credit. They said it was confidential.
Six years ago, problems with payday lenders prompted the then Consumer Finance Association (CFA) to set up a body to enforce standards. The launch of the Short-term Lending Compliance Board (SLCB) grabbed headlines. But I couldn’t find its contact details anywhere. Then I found it had dissolved itself in 2016.
I was left without further recourse, except prohibitively expensive legal action. I could only breathe a sigh of relief that Lending Stream hadn’t first blighted me a month earlier, when I’d been arranging a bridging loan to cover a house move.
At the end of January, I received an email from Lending Stream saying it would withdraw the damning ‘unpaid debt’ notification from the credit rating listings. But they’d copied the fraudster into the email. Lending Stream and the FOS refused to let me see any of the fraudster’s details, such as the bank account or address used, ‘because of the Data Protection Act’.
Now the fraudster had my email address, and may use it to mine more details about me.
Last week I emailed Lending Stream warning that I was publishing my experiences in Money Mail — including its flagrant breach of my confidentiality.
Lending Stream said it ‘regrets the inconvenience’ I suffered — and promised a cheque for compensation.
It made no mention of breaching data protection regulations by sending my email address to the scammer. Instead it said, ‘We consider this matter as closed.’
So much for confidentiality, fraud protection and a system that is supposed to look after victims of identity theft.