Universal credit loan scam warning that will stop your benefits and leave you broke


Families are warned of a new scam that unwittingly registers them for universal credit, then leaves them penniless.

Police said agents at Trading Standards had been made aware of the scam, which is said to operate across the UK.

What is the scam?

People are contacted by fraudsters claiming to offer low cost government loans. But the victim’s personal data is used to apply for universal credit and then request a substantial down payment from the reports of the Ministry of Work and Pensions. Birmingham live.

The crooks take part of this prepayment themselves – the victim’s current benefits are then stopped and replaced with universal credit. They are required to repay the loan in full from future payments from Crédit Universel.


A pregnant mother of three from Buxton, Derbyshire, is among those who have been duped.

The woman applied for an emergency loan online so that she could replace her broken stove.

She was told that a loan of £ 1,500 had been approved and that she had received the money in her bank account, less the upfront administration fee of £ 400 which the company had taken for herself.

But then, all of the new mom’s usual allowance payments never showed up in her bank account.

She was baffled and called the DWP, finding that the loan company had in fact used their contact details to ask Universal Credit and get an early payment of £ 1,500 of the new benefit – from which they had taken the high fees.

As she had been affiliated with the Universal Credit, the DWP then suspended all of the Applicant’s existing income support, housing allowance, family allowance and child tax credits benefits.

And because she had received the early loan, she could not get an immediate universal credit payment to live on. She must now repay the loan from future UC payments.

Victim says she lost around £ 1,000 per month

The 26-year-old said the bogus application for universal credit was approved by the Department of Work and Pensions (DWP), even though she had never met anyone in person.

“Surely they should have asked me to come down for a face-to-face [meeting] or something before checking this account, “she told the BBC.

“I must have missed meals just to feed the children. It’s depressing.”

Work and Pensions Minister Justin Tomlinson said he would investigate.

He said he was dealing with the matter “urgently”.

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