Loan fee fraud

Advance fee fraud, also known as loan fee fraud, is a prevalent scam in which people are tricked into paying a charge to secure a loan. 

Typically fraudsters request small amounts ranging from £25 to £450. Once paid the loan never materialises.   

If you have applied for loans scammers may well target you and appear to be from reputable companies.

What to look out for: Pressure to secure the funds by bank transfer, crypto, or vouchers are huge tells. They may say your payment is refundable but once they have the money you will not hear from them again.

The average loss is £255 more often than not at a time when people need it most.

According to the Financial Conduct Authority an official loan offer should include:

• The name of the firm as it appears on the Firm Checker.

• A statement that the firm is acting as a credit broker.

• A statement saying if you need to pay a charge for the firm’s services.

• The amount of the charge (or how it will be calculated).

• When the firm will take payment from you and how you'll pay.

Read the full article by the FCA here