With the huge recent increase in popularity of the Logbook Loans system, many people are beginning to fall foul of scams that originate from these new types of quick and easy loans.
Many people in the last few months have been posting on the internet about how they have been receiving letters from Logbook Loans companies demanding that their car be repossessed for finance still owed on a loan that they knew nothing about. It seems more and more people are getting stung.
But what is actually going on? Well, a new scam is arising via the world of used car buyers. What some scammers are beginning to do is take out a Logbook Loan secured against their vehicle (which by law then gives the Logbook Loans company ownership of the car). Because of the simplicity and speed of Logbook Loans the person could have the money within 24 hours. From there these scammers bring in another accomplice who will buy the car from the person, what this aims to do is to hide the fact that a logbook loan has been taken out on the car as the new owner (the accomplice) doesn’t have the loan and he can say the logbook had been missing or even just not provide it to the company.
Now from there is when the scam becomes harmful to the public, the accomplice will then try to sell the car on to an unsuspecting victim. HPI checks can sometimes show up the Logbook Loans but they don’t always work or some people don’t even take out HPI checks so once the car is bought, the scammers have their loan and money from the sale of the car and the victim is left with letters from the company saying they are going to come and repossess the car.