The Financial Ombudsman Service has had dozens of complaints about an unauthorised bank that falsely claims to pay off mortgages for a £10 monthly fee.
The Daily Mail reports that customers of WeRe Bank, based in Manchester, face reposession, late payment fees or wrecked credit records by dealing with the bank.
The firm told customers for a small monthly payment and the pledge of £150,000 over 10 years they would get a chequebook in the made-up currency ‘Re’.
WeRe claims lenders are obliged to write off debt when they get one of the cheques, under the Bills of Exchange Act 1882.
But lenders are refusing to accept the cheques. The FOS has warned consumers of the dangers of dealing with the firm.
The newspaper reports one man faces having his home repossessed after attempting to pay off a £67,000 mortgage with The Mortgage Works with a WeRe cheque.
The Mortgage Works refused and the borrower turned to the FOS, but the ombudsman ruled the cheque was not worth the paper it was written on.
WeRe could not be reached for comment and its website appears to have been taken down.
In September last year the FCA issued a warning about the bank.
It said: “Although WeRe Bank refers to itself as a bank, based on the information currently available to us, it does not appear to be carrying on any activities that would require it to be authorised by the FCA. Regulated activities carried out by authorised firms include accepting deposits or providing advice on regulated investments.
“We are concerned that vulnerable consumers may be attracted to WeRe Bank’s claim that they will be able to pay off their debts ‘for free’ using Re cheques, even though they have not had to pay any money into an account.”