With a Christmas blighted by the cost of living crisis, there are fears more people could lose money to fraudsters offering non-existent loans.
The Financial Conduct Authority said it receives an annual increase in reports of loan fee fraud over the festive period.
Loan fee fraud happens when someone pays a fee for a loan they never receive – and the FCA is concerned that rising financial stress could place more people at risk of scammers’ tactics this year.
Emma Francis (not her real name) fell victim after escaping an abusive relationship where her ex-partner controlled all their money.
The single mother-of-three found herself facing a Christmas with no money and didn’t want to let her children down.
After searching for payday loans, she found a website offering “guaranteed” loans and paid, what she thought was, a £49 admin fee for a £500 loan.
“After paying, I rang them and they told me to go to a bank for a loan,” she told Sky News.
She then looked at the small print of the website which admitted the firm was a “broker, not a lender”.
“The advice they offered me was just that one line. Go to the bank. I knew then I wasn’t getting my money back,” she said.
“I was very vulnerable and looking back I was quite naive about it.
“It was a lot of money and I felt so foolish.”
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