Lloyds Bank has issued an urgent warning as the rate of 'advance fee' scams surged over the past 12 months.
Victims of the scam are often asked to pay an upfront fee for goods or services that they never actually receive. Common things a victim could be asked to pay for include a loan, a rental property, or sometimes even a new job.
With the rising cost of living continuing to affect Brits, many financially vulnerable people are being targeted by loan fee scams. According to the bank, reported cases have soared by 82 per cent over the last year and are continuing to increase.
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Liz Ziegler, Fraud Prevention Director, Lloyds Bank, said: “Fraudsters will ruthlessly adapt to any changes in consumer behaviour and, with the increased cost of living putting more pressure on people’s finances, the recent surge in advance fee scams targeting those on low incomes or with a poor credit history is alarming.
“The important thing to remember is that a genuine lender will always conduct thorough credit checks prior to agreeing a loan and won’t ask for an upfront payment before releasing the funds. If you’re concerned in any way about your finances there are lots of reputable organisations that can help, and it always makes sense to speak to your bank first.
“The abundance of these fake online ads reinforces the importance of the government’s Online Safety Bill to ensure social media sites and search engines stamp out fraudsters operating on their platforms.”
Victims of the scam lose an average of £711, according to the bank. New analysis also shows that the highest number of cases has been reported in London as well as the West Midlands - with the number of cases reported around 20 per cent higher than average.
Meanwhile, those aged between 25 and 34 are most likely to fall victim, followed by 35 to 44 years old - these make up around half (49 per cent) of all victims.
To help avoid being a victim of loan fee scams, Lloyd Bank recommends doing the following:
- Research before making any deal with a company to ensure they're real. The FCA website is a useful tool which shows legitimate firms and their details.
- Avoid any company that claims it can guarantee you a loan regardless of your credit status.
- You should never be asked to pay an upfront fee for loan, anyone asking this is likely a scammer.
- If you're concerned about your financial situation, speak to your bank first. THey can provide help and point you in the direction of a reputable organisation.
