The number of victims of Wonga-related fraud continues to grow
Filed under: Scams & Fraud
The money was refunded when the fraud was uncovered, but it raises unanswered questions about how fraudsters are getting their hands on the cash.
FraudThisisMoney has reported a number of cases where victims have had Wonga loans taken out in their names by fraudsters. They only became aware of the loans when the fraudsters failed to make repayments, so Wonga took the money directly from their bank accounts.
When anyone takes out a loan with the company, they set up something known as a Continuous Payment Authority, which allows Wonga to take small repeat payments from their debit card - which is designed to pay the loan back automatically.
The fraudsters use the names and addresses of the victims, and use the victim's bank account for the continuous payment authority. They have the loan paid into a separate account - from which they withdraw the cash and run. The first thing that the victim knows about the fraud is when the repayments start coming out of their account.
When they were alerted to the fraud, and the wrongdoing was uncovered, Wonga repaid the money. However, the newspaper said that there had been nothing forthcoming about how the fraudsters were getting around the payday lender's identity checks.
ChecksWonga has come under scrutiny over these checks before. In August and September last year, The Guardian reported a spate of cases where fraudsters had taken loans in other people's names, and the BBC's Watchdog programme investigated.
Much was made of the fact that loan offers are made in 15 minutes - and whether proper checks can accurately be carried out in this sort of time. The company vigorously defended its checks. In a statement it said: "We take every case of fraud seriously and have every sympathy for the victims of identity theft. Our automated technology is at the cutting-edge of screening out fraud and we achieve roughly a tenth of the fraud levels seen by the rest of the e-commerce sector."
Some commentators have also pointed to those lenders who will only take a continuous payment authority from the bank account that the loan is initially paid into. Wonga says its customers are protected by the fact that the account the cash is paid into and the debit card must be in the same name. However, it seems that criminals are getting around this particular layer of protection.
The steady flow of these cases is building momentum. There is now a twitter account, @aloadofWonga, set up by a fraud victim who says: "Wonga credit checked me and paid the criminal."
It calls for tweets to help collect data on the number of people who have been hit by this fraud. In the last week alone the account has had fresh tweets from @CraigRadford88, @aelhawley, @itspaulmcgroovy, @itabSteve, @tinyminds, and @_amysallis who all say they have been victims of this fraud in that time.