The OFT has imposed a £544,505 financial penalty on the online payday lender MCO Capital Limited (MCO) for breaching the Money Laundering Regulations 2007, including its failure to adequately verify the identities of loan applicants. The OFT has also revoked MCO’s consumer credit licence.
It is thought that MCO’s failures led to it being targeted by fraudsters who used the personal details of over 7,000 individuals to successfully apply for loans amounting to millions of pounds. The Money Laundering Regulations 2007 require lenders to conduct appropriate identity checks and are designed to reduce the risks of businesses being used for money laundering and terrorist financing.
The OFT found that MCO had also engaged in unfair business practices by writing to people, who they were aware may not have taken out loans, asking unequivocally for repayment. MCO also ignored the OFT’s requests to stop this practice. Additionally, MCO was found to lack the necessary skills, knowledge and experience to run a consumer credit business. All of these failures justified the revocation of MCO’s consumer credit licence.
OFT press release link: click here
Related news link: click here