Two cases of a money laundering scam reported in the Honiton and Axminster area.

Police have issued an urgent appeal to warn members of the public of a new money laundering scam circulating in the area.

There have been two reported cases in the Honiton and Axminster area with scammers preying on those who are out of work or may be seeking a loan.

Police believe the offenders are operating outside of the UK.

As part of the scam victims are asked to pay money to release the funds but the loan never arrives.

A police spokeswoman said: “Essentially, the first part of the scam is where the offenders, who we believe may be operating outside of the UK offer loans, begin asking for administrative payments before they release the funds.

“These administrative payments begin to build up with the promise of the loan being just within reach if the victim makes another payment and then another payment.

“Of course the loan is never provided and the victim loses their money.”

Police say those behind the scam are putting the funds into British bank accounts where the second part of the scam begins.

The spokeswoman added: “The offenders are offering jobs as financial forwarding co-ordinators, a recent example was where contact was made with the victim by a company supposedly dealing in art.

“They then place funds in the accounts of the second victims, this being money taken from the first victims.

“They instruct the second victims to immediately pay the money via Western Union transfers into offshore accounts, some examples have been in Kiev or African countries where we do not always have the necessary co-operation between financial institutions to progress enquiries.

“This in effect launders the money and the offenders are benefiting from the funds.

“The first victims are losing and in some cases, the second victims because they have paid money back to the first victims and it was in effect ‘stolen’ cash.”

Anyone who is contacted online or by phone by people offering loans or employment which involves money being paid into their accounts is urged to report it to the police by calling 101.