Citizens Advice North Herts Explains No-Loan Fraud

Posted:
8:00 a.m. January 6, 2022



Citizens Advice North Herts works to educate the public about loan-less fraud.

In 2020, the Financial Conduct Authority saw a 32% increase in loan fee fraud reports at its contact center per month during the holiday season.

Over the past year, victims have reported an average loss of £ 274 from fraud. However, during the holiday season 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 partnered with the FCA to raise awareness of these scams.

But what is loan fee fraud?

A loan fee scam happens when you are asked to pay an upfront fee for a loan that you will never receive.

What are the signs of a loan fee scam?

There are several signs that can mean a scam:

You were contacted unexpectedly by SMS, email or phone and you offered a loan

You were asked to pay an upfront loan fee in an unusual way – Western Union, iTunes vouchers, or directly to a bank account

You have been told that the fee is refundable and will be used as a deposit, administration fee, or because you have a bad credit history

You are obligated to pay off the loan quickly

You are asked to make more payments before receiving the loan

In the end, you never get the loan.

What should I do if I have been scammed?

If you are looking for a loan and someone offers you one, before you do anything, check the FCA website to see if it is a registered company and what it is regulated. . If someone asks you to prepay for a loan, it is probably a scam and you should apply for a loan elsewhere.

If you are the victim of a scam, our #ScamsAction service can help. The Citizens Advice Scams Action service provides free, unbiased and confidential advice on scams. In addition to advice on the scams themselves, we can also help you with other issues such as debt or housing.

The Financial Conduct Authority is the conduct regulator for 51,000 financial services and markets companies in the UK. In addition, they provide advice to consumers on a wide range of financial scams and provide complaint services.