The U.K.’s financial regulator has warned consumers to be wary of Christmas scams.
With inflation in the double figures, many in the country are turning to credit options to help fund their Christmas shopping, and fraudsters are taking advantage of the seasonal upsurge in borrowing to scam unsuspecting consumers.
Loan fee fraud involves consumers paying fees for loans they never receive. And as recent research from the Financial Conduct Authority (FCA) shows, this year the volume of scams has risen.
At the beginning of the festive shopping period, the FCA had already witnessed a 21% increase in the number of cases being reported in the year to November. And the volume of complaints is likely to have risen since then as loan fee fraud typically peaks during this time of year.
The seasonal uptick in this particular type of fraud is so prominent that last year, the FCA launched the country’s first official anti-fraud jingle on Apple Music and Spotify, “designed to be a lighthearted, engaging way to spread awareness of loan fee fraud advice to consumers this Christmas,” the watchdog said at the time.
What is most concerning about loan fee fraud is that victims are often society’s most vulnerable.
As the FCA has warned, scammers tend to target people with poor credit ratings, using this to justify the upfront fee to those who may not have other credit lines available and are struggling to make ends meet during the holidays.
Moreover, the financial fallout of…
