Consumers need to be extra vigilant this Christmas as loan fee scams are on the rise, with cases already up by a fifth on last year.
The Financial Conduct Authority (FCA) is launching a campaign for shoppers to not fall victims to the scam as fraudsters pile on the pressure at Christmas.
Loan fee fraud is where a consumer pays a fee for a loan they never receive. The financial watchdog said it usually receives an increase in reports of loan fee fraud over the festive period. This year alone, the number of cases reported have jumped by 21% compared to the previous year.
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The average loan fee fraud costs consumers £260, more than half the total amount people expect to spend on Christmas presents this year (£444).
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “This Christmas period is going to be tough for many consumers, and those who have been hardest hit by the rising cost of living will understandably be anxious about meeting the additional expenses that Christmas brings. Some consumers may be tempted to take out loans to meet these extra costs. Unfortunately, this is where loan fee fraud scammers and illegal lenders see an opportunity.”
One frequently used tactic by loan fee fraudsters is to pressurise consumers, seeking fast payment for a…
