A payday lender has had to pay a fine of more than half a million pounds and has had it’s licence revoked. The Lender fell victim to fraudsters impersonating thousands of people to take out loans.

MCO Capital, under the name Help Loan and Balance Loan, had failed to carry out adequate identity checks, found the Office of Fair Trading (OFT).

The OFT said that Its failures made it vulnerable to fraudsters, who used the personal details of more than 7,000 people to successfully apply for loans worth millions of pounds.

And that MCO Capital then caused “unnecessary distress and inconvenience” by writing to people to collect the debts, even though it knew they might not have actually borrowed the money.

The OFT has imposed a £544,505 financial penalty on MCO Capital and revoked its consumer credit licence, which it needs in order to trade.

The lender said in a statement: “MCO Capital is disappointed at the decision of the Office of Fair Trading and is studying the adjudication that it takes very seriously.

“When we have had time to fully consider the decision of the OFT will we be in a position to decide our next steps, which could include lodging an appeal. MCO continues to trade as it is fully entitled to do so whilst a decision regarding a possible appeal is being made.”

Lenders must carry out appropriate identity checks under the Money Laundering Regulations, to make sure they don’t accidentally help money laundering and terrorist financing.