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At LCollect we believe that knowledge is power. Every month our debt collection blog gives you practical tips, stories and news from around Australia and the world.

Finance Broker Pleads Guilty to Loan Fraud

Friday, April 27, 2018 - Posted by Michael McCulloch

A former finance broker has appeared before the Perth Magistrates' Court following charges being laid over giving false information and fraud.

ASIC allege that between January 2013 and April 2013 that Peter Lachlan McDonald of "Get Approved Finance" provided Esanda information that falsely represented consumers. In a statement to the media ASIC said, "...between January 2013 and April 2013, Mr McDonald, in the course of brokering four motor vehicle finance contracts, provided the lender Esanda with information that falsely represented that persons, who had in fact only agreed to be loan guarantors, were the applicant borrowers who would ultimately own the vehicle to be financed."

ASIC went on to say that in 1 case Mr McDonald inserted what he "purported" to be a consumers signature on an extended warranty policy and submitted the documents to Esanda.

Following an investigation by ASIC Mr McDonald was permanently banned in July 2015 from engaging in credit activities and providing financial services with a number of Get Approved Finance Brokers also being banned by ASIC for similar actions. 

We had previously reported ANZ had been found to have breached responsible lending laws with ANZ, the former owner of Esanda, agreeing to compensate more than 70 borrowers a total of $1.38 million for car loans organised by Get Approved Finance.

Mr McDonald has pleaded guilty to the charges and and was bailed to appear on Thursday, 10 May 2018 for sentencing.

Source: Sydney Morning Herald - April 2018


Equifax Data Breach

Monday, October 30, 2017 - Posted by Michael McCulloch

Equifax, one of the 3 largest credit reporting agencies in the US has revealed that between mid May 2017 and July 2017 that they were subject to a security breach.

The personal data of 143 million US customers was exposed with names, addresses, dates of birth and social security numbers leaked. The initial breach was first reported in March 2017 however during the May 2017 and July 2017 period hackers ransacked vast troves of information. Much remains unknown about the attack with security experts and Equifax now focusing on what the company did or didn't do in the lead up to the attack including their response to the original flaw found by Cisco.

Since the hack more than 11.5 million Americans have signed up for credit monitoring while others have frozen their credit reports with not only Equifax but also their rivals TransUnion and Experian.

Equifax have since disclosed that following the breach approximately 209,000 customers had credit card numbers stolen. Those credit card numbers are likely those who had previously purchased the credit monitoring service provided by Equifax in the hope of securing an additional layer of protection from fraud. Equifax have said in their latest report that it is regularly the target of cyber threats and has made substantial investments in security measures.

The breach is now subject to a federal investigation.

Source: PBS - 3 October 2017


1 Error Results in $4.6M Debt

Friday, May 13, 2016 - Posted by Philip Harvey

An internal oversight at Westpac permitted at 21 year student to overdraw an account by $4.6 million.

Allegedly, an account was opened by the student in 2012 with no overdraft. In 2013 fraud complaint prompted the account to be investigated, though no fraud was found. 

Apparently the internal practices of Westpac was that the branch were the account was opened held responsibility for monitoring accounts in overdraft. However, when an account is investigated for fraud, the status is changed such that the branch no longer receive the relevant reports.

The apparent issue was that the account status was never changed back after the fraud investigation was concluded.

With no one monitoring the account, the student progressively went on a spending spree buying designer handbags, jewellery, clothes, etc

It was not until the student put over $1M in transactions in one day through PayPal that an internal team at Westpac noted the account and promptly sought to rectify the problem.

As widely reported by the media, the student debtor was arrested at the airport attempting the fly back to Malaysia.

The matter is now before the court with criminal charges put forward.

Source: Sydney Morning Herald


Debtor Reports Bike as Stolen to Avoid Repo

Friday, September 25, 2015 - Posted by Philip Harvey

In Ipswich, QLD, a debtor was convicted of fraud for falsely reporting his motorbike as stolen to police.

The debtor had purchased the motorbike using finance and did not meet the payments under the Credit Contract. With the loan in arrears the debtor took the motorbike to a friend's place, and requested his friend store it, informing the friend they believed the bike would be stolen from his place. The debtor retained the keys and requested no one be allowed ride the bike.

After reporting the bike as stolen, police investigations located the bike at the friends shed. At a subsequent interview with police, the debtor did not change his story and denied all knowledge of the bikes whereabouts, instead fabricating a story that one of his son's friends must have moved the bike.

When these events proved false, the debtor was arrested, pleaded guilty and eventually made arrangements to repay the debt.

Source: The Queensland Times


National Consumer Fraud Week 2014

Friday, June 20, 2014 - Posted by Michael McCulloch

While doing some recent research for our most recent articles and having discussions with our clients we came across several websites where you can enter your customers / members details to submit them for debt collection purposes.

These sites are not marked with the https prefix and you could be jeopardising your customers / members details by entering personal identifiable information in an unsecured environment. While the likelihood of this is minimal there is still a risk. We urge you to make sure that when you enter this type of information online that the site is secure and look for not only the https prefix but also the padlock symbol. We urge you to discuss any of your concerns regarding the input of identifiable information on websites with your current provider.

At LCollect both our client online access and online forms are secured by this technology to ensure maximum security at all times.

With that in mind we would also like to remind everyone that it is National Consumer Fraud Week. With the ever changing nature of technology it goes without saying that we must all be very wary of not only the information that we provide online but also the level of access that we provide to our social media sites.

You can read more by clicking the graphic below.



Fraudulent Debt Collection Colorado US

Saturday, December 07, 2013 - Posted by Philip Harvey

The Colorado Attorney General has commenced proceedings against United Credit Recovery (UCR), GTF Services and Standley & Assocaites.Debt Collection around the world

The claim alleges that the debt collection firms sought to pass off fraudulent bank documents in attempting to collect outstanding debts, engaging in misleading and deceptive conduct to the detriment of consumers.

Allegedly the in the scheme;

  • UCR purchased debts from banks
  • they would use the information provided in the purchase to create fake affidavits, verifying and describing debts owed by consumers
  • UCR would then orchestrate a debt-for-sale scheme, reselling the debts to third parties at a profit (GTF Services)
  • The 3rd party agencies who subsequently purchased the debts would use the fake affidavits in court proceedings (Standley & Associates were the law firm, there were apparently more than 300 legal proceedings)
  • Consumers would then make payments.

 This type of debt collection activity in Australia would also almost certainly be pursued very aggressively by our local authorities.

This article was sourced from http://www.coloradoattorneygeneral.gov/press/news/2013/12/10/attorney_general_brings_suit_against_fraudlent_debt_collection_companies



Photocopiers and Privacy

Thursday, July 01, 2010 - Posted by Philip Harvey

Have you ever thought about how your organisation disposes of its Photocopiers?

Nearly all photocopiers contain a Hard Drive, with most digital copiers storing an image of every scan, image & print job. The below case study is a good reminder of ways data that would be covered by the Privacy Act may be unwittingly disclosed:


In February 2010, news service CBS accompanied John Juntunen, the founder of DCSI (Digital Copier Security Inc) to a warehouse in New Jersey to discover how hard it would be to buy a used copier loaded with documents and discovered that it was pretty easy! Based on price (less than US $300 each) and the number of pages printed, Juntunen selected 4 machines. The original owner and use of those copiers were not known until after the copiers had been unpacked and plugged in. 

CBS reported that within half an hour, Juntunen had removed the hard drives from the 4 copiers and then used a forensic software program available for free on the Internet to run a scan which allowed him to download thousands of documents in less than 12 hours. 

On one of the copiers, they found documents still on the copier glass, from the Buffalo, N.Y. Police Sex Crimes Division. Getting into the data from that copier, they found detailed domestic violence complaints and a list of wanted sex offenders. 

On a machine from the Buffalo Police Narcotics Unit they found a list of targets in a major drug raid. 

The third machine had previously been used by a New York construction company and yielded design plans for a building near Ground Zero in Manhattan, 95 pages of payslips detailing names, addresses and social security numbers and $40,000 in copied cheques. 

The final copier purchased, originated from Affinity Health Plan, a New York insurance company – this copier gave up 300 pages of individual medical records, everything from drug prescriptions, to blood test results, to a cancer diagnosis.


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