BORROWERS could lose hundreds in cash due to loan fee fraud this Christmas, the financial regulator has warned.
The Financial Conduct Authority (FCA) receives hundreds of complaints from borrowers who lose between £25 and £450 every year after falling victim to loan fee fraud.
And the FCA typically receives an increase in reports of this type of fraud over the busy Christmas period.
Loan fee fraud happens when someone pays a fee for a loan that they never receive.
The FCA is concerned that rising financial stress due to the cost of living crisis could place more people at risk of scammers’ tactics this year.
Those falling victim to loan fee fraud stands to lose £260 on average, according to the regulator.
These scams have already increased in frequency in the past year, with the number of cases reported rising by 21% between November 2021 and October 2022 compared with the same period a year earlier.
The FCA is reminding borrowers to check its register if they are ever asked to provide an upfront payment for a loan.
It found that nearly two-thirds 64% of consumers are unaware of what loan fee fraud is.
Mark Steward, executive director of enforcement and market oversight, 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…
