A widowed retiree was shocked to learn that a duped finance company suing her over bogus debt had trashed her credit rating. Photo / Sylvie Whinray
A distressed retiree was shocked to learn that her credit rating had been ransacked by a duped financial company suing her over an allegedly fraudulent loan.
Three financial firms were allegedly tricked into providing a $ 20,000 loan in the woman’s name without her knowledge after the 79-year-old widow was reportedly the victim of identity theft earlier this year.
She claims she only realized she was responsible for the debts after one of the companies filed a warning against her humble Auckland property and another threatened to repossess her property furniture.
After the Weekend Herald intervened, two of the companies gave up their debts, admitting that they had been taken over.
But Christchurch-based Alternate Finance refuses to back down. Her credit report shows the company is still suing her for thousands of dollars that she claims to be over six months late.
Debt once caused her to have a positive credit rating of 863/1000, “very good”, to 539/1000, “fair” – limiting her chances of getting credit cards, loans, or utilities.
She only learned of her bad credit after being turned down as a customer last month by Meridian Energy after a credit check, which embarrassed and upset her.
“I couldn’t believe it because I know my credit rating is good. I still pay my bills.”
She believed Alternate Finance had failed to perform proper checks before issuing the loan and “must be desperate enough” to sue an elderly woman for the money.
After being made aware of the suspected fraud by The Weekend Herald, the Centrix Group rating agency said it had now cleared the woman’s bad loan records linked to Alternate Finance.
“As a credit agency, we have an obligation to provide current, accurate and up-to-date information,” said Centrix Managing Director Keith McLaughlin.
“Now we have been informed that this is a fraud, we will take action.”
The woman filed a police statement earlier this year suspecting a relative of using her driver’s license to successfully apply for the loans online.
And despite the evidence they claim to point to the likely culprit, just seven days later, police said they were dismissing the case because “we haven’t been able to find out who is responsible.”
The police investigation was reinvigorated in the wake of the Weekend Herald coverage and a 25-year-old man has now been charged with using a document for monetary gain. He is expected to appear in court early next year.
McLaughlin analyzed the woman’s credit report. Prior to the loan applications, the woman’s credit profile appeared normal with little activity “until there are potentially fraudulent events.”
“In a confined space of time, someone attempted to take out credit under that name.”
McLaughlin said the Alternate Finance loan was the main reason the woman’s credit rating had deteriorated, along with the number of credit applications made this year.
He had now taken the Alternate Finance loan off his file and wiped out the other credit applications, rectifying his previous strong credit rating.
Centrix would also raise the issue with Alternate Finance.
“We will get back to them and tell them that we have been informed that this is suspected fraud and as such we cannot keep it in our database. Our job is to make sure that we are accurately communicating information. “
Alternate Finance is owned by David Leighton Diggs, also owner of Crester Credit. The companies were fined $ 103,500 in 2019 for taking security interests in banned consumer goods, including washing machines, refrigerators, microwaves and beds.
The Weekend Herald asked Alternate Finance why it was still suing the woman and if it would now do the right thing and give up the debt, but received no response.
FinCap’s senior policy adviser Jake Lilley said he didn’t know all the details of the woman’s case, but the situation looked horrific.
“I’m surprised they’re digging on this one.”
Most lenders in these situations “take a sensible approach and recognize the harm done and if there has been a failure in their processes, admit fault.”
Consumers should dispute payment requests if they believe the money is not owed.
They could get advice through community law, FinCap’s free MoneyTalks helpline, or speak to a financial mentor who could take cases to the dispute resolution service.