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Meanwhile, when doing business with a stranger, stick to cash, a bank or cashiers check, or a service like PayPal, which has a mechanism for preventing this kind of fraud.

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Many of these requirements would not appear qualitatively different than many practices that most lenders already engage in, such as gathering information and documents from borrowers and ordering various types of consumer reports.

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The OFT said that consumers who are pursued by a lender for debt they do not owe should write to the lender, and where appropriate, the debt collection agency, making it clear why the payment is being refused.

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