8:00 AM January 6, 2022
Citizens Advice North Herts is working to raise awareness of loan free fraud.
In 2020, the Financial Conduct Authority recorded a 32 per cent increase in reports of loan fee fraud to their contact centre per month during the festive period.
Within the last year victims have reported an average loss of £274 per fraud. However, during the festive period this increased to an average of £355 as people’s spending increased, making them more likely to seek credit from loan providers.
Citizens Advice has teamed up with the FCA to raise awareness about these scams.
But what is loan fee fraud?
A loan fee scam happens when you’re asked to pay an upfront fee for a loan which you will never receive.
What are the signs of a loan fee scam?
There are several signs that might mean a scam:
You’ve been contacted out of the blue by text, email or phone and offered a loan
You’ve been asked to pay an upfront fee for a loan in an unusual way — Western Union, iTunes vouchers or directly into a bank account
You’ve been told the fee is refundable and will be used as a deposit, administrative fee or because you’ve got poor credit history
You’re pressured to pay the loan quickly
You’re asked to make more payments before receiving the loan
Ultimately, you never receive the loan.
What should I do if I’ve been scammed?
If you’re looking for a loan and are approached by someone offering one, before you do anything…