Scammers are targeting consumer borrowers ahead of the festive season this year, amid warnings that loan fee fraud is set to rise again.
Last year, there were 1,456 reports of loan fee fraud, with victims losing an average of £274 each. The Financial Conduct Authority (FCA) reported that it saw 32 per cent more loan fee fraud calls last Christmas than in the rest of the year.
The regulator is now warning consumers to be aware of loan fee fraud, and urging people to only work with regulated lenders.
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The FCA has told people to look out for unsolicited calls, text or emails which offer a loan out of the blue. Scammers will then ask the consumer to make an upfront payment, which may be into a bank account, by money transfer, or via Amazon or iTunes vouchers. This may be positioned as a deposit or admin fee, and scammers will sometimes claim that it will be refunded when the loan is issued.
Sometimes the fraudsters will contact the same consumer again asking for another payment to secure the loan.
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