Interactive Investor

Surge of loan fee fraud during the festive period

9th December 2021 10:45

Jemma Jackson from interactive investor

interactive investor's personal finance campaigner Myron Jobson comments on the exploitation of people’s desperation to borrow.

  • Last year, the FCA recorded a 32% increase in loan fee fraud calls across the festive period compared to the rest of the year
  • The FCA’s anti-fraud jingle is designed to be a light-hearted, engaging way to spread awareness of loan fee fraud advice to consumers this Christmas

Myron Jobson, Personal Finance Campaigner, interactive investor, says: "Unscrupulous criminals will stop at nothing to commit fraud, especially if it means exploiting people’s desperation to borrow at Christmas – leaving many facing a real-life nightmare before Christmas.

“Loan fee fraud, where fraudsters reach out to the victim and offer them a loan but demand an up front fee for the money that the victim ultimately never receive, tends to spike during the festive period, leaving victims facing a higher mountain to climb to get out of debt. With the exception of some financial products such as mortgages and equity release loans, borrowers are not required to pay an up front fee to take out a loan in most cases.

“People often feel pressured to spend more than they can afford on elaborate gifts and food, and many may be willing to pay over the odds this year after Covid restrictions scuppered last year’s celebration for many. Attempts to create a perfect Christmas for loved ones result in millions dipping into their overdraft, upping the use of their credit card, taking out loans and using buy now pay later services each year. Regardless of your budget, it is important to spend within your means than head into the new year with financial difficulties because of your Christmas spend.

“Scammers are indiscriminate in who they target, so we all need to be on our guard. Treat any unsolicited contact on loans with caution. You can check the FCA register to verify the legitimacy of financial firms. Watch out for a dodgy-looking website address, poor grammar and spelling, and a lack of reliable contact information among other things. But also be mindful that scams are becoming increasingly sophisticated, too. And never trust anyone wanting personal information.”

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