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Been asked to pay an upfront loan fee? It could be fraud

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Financial pressure can build up in January after the festive and New Year celebrations.

Published: 17/01/2024

The Financial Conduct Authority (FCA) report that this is when people may be more vulnerable to loan fee fraud, one of the most common types of scams reported to them.

What is loan fee fraud?

Loan fee fraud is a common scam where fraudsters trick people into paying a fee for a loan. They'll often ask for a fee of between £25 and £450 for a loan you'll never receive.

How to protect yourself

If you need to apply for a loan, you should only deal with authorised firms. If you don't, you won't be protected if things go wrong, and you could lose lots of money.

Scammers will often try to target people who've applied for loans online. They may contact you unexpectedly offering you the money you need. But before giving you the loan, they'll ask for an upfront payment as a deposit, administrative fee or insurance. They might claim it's because you have a bad credit history.

You can take steps to help protect yourself. Before you agree to any loan, check the following:

· Have you been cold-called or emailed?

· Have you been asked to pay an upfront fee?

· Have you been pressured to pay quickly or unusually?

If you've answered yes to any of the above? Stop and check again to protect yourself from loan fee fraud.

What if you're already a victim of loan fee fraud?

If you're worried you’ve been scammed or think a fraudster may have contacted you, please report it to the FCA.

Learn more about how loan fee fraud works and how to protect yourself.

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